Gold briefly traded flat on the day at $4480 after falling as low as $4100. It's since slipped again and is down $50 to $4440.It's an incredible move in an asset that's now trading off of energy and economic shock narratives. The fear is that a prolonged shock and +$150 oil with shortages leads to a global recession in a stagflatioary period. That cut the legs out of gold and pushed sovereign yields much higher.That sort of scenario might have been impossible to avoid if energy infrastructure and desalization in the gulf was destroyed.With Trump announcing talks, it indicates that he won't go so far as to destroy energy, as he'd threatened to do. There was always the sense in markets that he wouldn't go too far but there now a fear that hardliners are in control in Iran.The question now is: What happens if the US stops bombing Iran. Will they allow the reopening of Hormuz or will they want something in return? Iran has been severely bombed but it does hold energy leverage and is asking for compensation and security guarantees. As for the price action, a close back above $4400 would indicate a false breakdown in the chart as that's an important level. At the moment, we're looking for signs of real talks or the parameters of a real peace. Given Trump's personality, he needs to credibly have a 'win' on this conflict and that might just be a self-proclamation that "Iran won't get a nuke" but that needs to be engineered in the right way.The other party to watch is Israel, who reportedly bombed Iran's infrastructure last night. They seem far less eager to walk away from this conflict and it's not clear that Trump could pull the plug on their operations. This article was written by Adam Button at investinglive.com.