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  • Headlines on U.S.-China trade dispute continues to drive the market action.
  • US Dollar Index moves sideways below mid-97s.
  • Wall Street set to open lower on Friday.

The troy ounce of the precious metal gained $7 on Thursday as the uncertainty surrounding the U.S.-China trade conflict ramped up the demand for traditional safe-havens. With investors moving to the sidelines before trade talks continue in Washington today, the XAU/USD pair is staying relatively quiet near the $1285 mark.

Yesterday, sides failed to reach a trade deal and the U.S. tariff hike on $200 billion worth of Chinese good went into effect. Regarding Thursday’s negotiations, several news outlets reported that talks saw little progress. Markets are now waiting for China to announce its retaliatory measures.

Meanwhile, talks are said to continue today in Washington and investors will be paying close attention to any headlines coming out of today’s meeting. Nevertheless, the market sentiment is likely to remain sour as the S&P 500 Futures drop 0.7% on the day to suggest that Wall Street will open the day in the negative territory.

On the other hand, the US Dollar Index remains stuck in its daily range below the 97.50 mark, making it difficult for the pair to set a near-term direction. The U.S. Bureau of Labor Statistics is set to publish its inflation report today. A softer-than-expected CPI reading could force the greenback to continue to weaken vs its major rivals and help the pair push higher and vice versa.

Technical levels to watch for

The pair could face the first resistance at $1291(May 8 high/50-DMA) ahead of $1298/$1300 (100-DMA/psychological level) and $1309 (Apr. 11 high). On the downside, supports are located $1280 (20-DMA), $1273 (Apr. 25 low) and $1266 (May 2 low).