Gold remains flat near $1,285 amid trade-led risk-on/risk-off

• Gold is struggling to post gains amid two-way business in related markets.
• The US-China trade negotiations have been extended to Friday.
• The planned US tariff hike is set to take effect at 12:01 am New York time.

Gold is trading in a sideways manner with related markets in a confused state with respect to US-China trade developments.

As of writing, the yellow metal is trading largely unchanged on the day at $1,285 per Oz, having faced rejection at the 50-day moving average (MA) line earlier this week.  

The futures on the S&P 500, which were reporting a 0.15% gain in early Asia, fell into the red a few minutes go to report a 0.30% loss on the day. The decline, however, was short-lived and the futures are now reporting little change on the day.  

The two-way business indicates the markets are alternating between risk-on and risk-off.  The risk was bought in early Asia after Trump issued an upbeat message on trade relations with China. Further, the talks between the two countries, which kicked off in Washington yesterday, have been extended to Friday, offering hope of a last minute deal.

The US, however, is going ahead with the planned tariff hike on Chinese goods, forcing markets to consider the possibility of trade discussions again ending with no deal.

Looking forward, trade-related news flow is expected to dominate the market sentiment. The yellow metal may pick up a bid and revisit the weekly high of $1,291 if the US-China trade issues weigh over the US dollar. As of writing, the Dollar Index, which tracks the value of the greenback against majors, is trading largely unchanged on the day at 97.37.

Pivot points