Gold Edges Higher as US-Iran Tension and Rate Expectations Weigh
Gold prices ticked up slightly on Tuesday as investors weighed the uncertainty of US-Iran diplomacy against resilient American employment. The yellow metal rose 0.2% to $4,062.41 an ounce by 5:04 AM GMT, remaining within its tight $4,000-to-$4,200 range.
The geopolitical tension supporting defensive assets is being countered by higher energy costs and expectations of another US rate increase, which threaten to lift bond yields and reduce gold's appeal.
A renewed escalation in the conflict could strengthen safe-haven demand for gold, but progress towards an agreement might also have a positive effect on prices indirectly by lowering oil prices and easing inflation fears.
US labour reports are the immediate catalysts as investors await job openings figures, private payroll data, and Friday's nonfarm payroll report for evidence that employment is cooling. The traders assign a 65% probability to a September rate increase.