NEW YORK (Scrap Register): Gold potentially can move higher amid geopolitical risks, although there’s always the risk of a fallback in prices if those worries abate, said UBS in a snippet.

The metal has risen with other safe havens largely amid worries about North Korea’s nuclear threat. Key technical levels come into focus for gold, triggering some decent market activity in the middle of this typically quieter summer period, the firm added.

Geopolitical risks tend to have quite a volatile influence on prices and the immediate risk here is that $20 move from yesterday is quickly faded. Gold is holding well so far. We think the risks are somewhat skewed to the upside here.

Although speculative bullish positioning in the Comex futures increased during the past couple of weeks, overall levels remain lean, analysts added.

“Subdued participation this year and lean positioning suggests that market participants would have to play catch-up on a break higher,” UBS added.

On the flip side, this also suggests that a pullback is likely to be relatively contained. Additionally, we had previously argued that uncertainty on Fed policy expectations is likely to keep gold broadly supported, especially given downside risks to inflation, analysts at UBS noted.