Gold struggles to build on early uptick, fails ahead of $1287-88 supply zone

   •  Renewed US-China trade tensions boost demand for traditional safe-haven assets.
   •  A modest USD uptick turns out to be the only factor capping any further up-move.

Gold surrendered a major part of its early uptick and is now headed towards the lower end of its Asian session trading range, closer to the $1280 level.

The precious metal built on Friday's post-NFP goodish bounce and opened with a bullish gap at the start of a new trading week amid resurfacing US-China trade tensions.

The US President Donald Trump threatened to increase tariffs on $200 billion worth of Chinese goods and China is reportedly considering cancelling the next round of trade talks.

The latest trade-related development dampened investors' appetite for riskier assets, evident from a slump in global equity markets, and boosted the precious metal's safe-haven status.

However, a modest US Dollar uptick, which tends to undermine demand for the dollar-denominated commodity, turned out to be the only factor keeping a lid on any runaway rally.

The latest leg of a downtick reinforced the $1287-88 supply zone, making it prudent to wait for a sustained break through the mentioned barrier before positioning for any further up-move.

There aren't any major market-moving economic releases due on Monday and hence, the USD price dynamics/trade-related headlines would play a key role in influencing the price action.

Technical levels to watch