Gold reverses early dip, remains supported by renewed US-China trade tensions

   •  The continuation of the recent USD rally to near two-week tops exerts some pressure.
   •  Uncertainties over a possible US-China trade deal/dovish Fed helped limit downside.

Gold traded with a mild negative bias through the early European session, albeit remained well within the previous session's broader trading range. 

The precious metal failed to capitalize on the overnight goodish bounce from over one-week lows and came under some renewed selling pressure in wake of the continuation of the recent US Dollar rally. In fact, the greenback stood tall near a two-week high on Friday and was cited as a key headwind for the dollar-denominated commodity.

Despite the pull-back, the downside remained cushioned amid a fresh bout of risk-aversion trade. Against the backdrop of broader market worries over slowing global growth, uncertainty over a possible US-China trade deal turned out to be one of the key factors boosting the precious metal's safe-haven appeal. 

On Thursday, the US President Donald Trump said he will not meet his Chinese counterpart Xi Jinping before March 1 deadline to achieve a trade agreement and dampened the recent optimism about a resolution of trade disputes between the world's two largest economies.

Meanwhile, a dovish turn on rate hikes by the Federal Reserve last week could further extend some additional support to the non-yielding yellow metal amid the prevalent risk-off mood and absent relevant market moving economic releases on the last trading day of the week. 

Technical levels to watch