Gold Price Volatility Masks Potential Upside Shock

Gold prices moved slightly on Tuesday as investors weighed the uncertain US-Iran diplomacy against resilient American employment that could keep Federal Reserve policy tight.

The spot gold price rose 0.2% to $4,062.41 an ounce by 5:04 AM GMT, remaining inside the $4,000-to-$4,200 range.

Geopolitical tension supported demand for defensive assets, but higher energy costs and expectations of another US rate increase threatened to lift bond yields and reduce bullion's appeal.

Bas Kooijman, chief executive of DHF Capital, said that progress in the US-Iran talks could lower oil prices, ease inflation fears, and pull down bond yields, making gold a more attractive asset.