Gold: US tariffs kicks in but no evidence of Safe haven bids

• The US-China trade war has become a reality, but gold remains in the red.
• The absence of safe-haven bids makes the yellow metal more vulnerable to strong US non-farm payrolls report.

The US-China trade war has become a reality after multiple rounds of failed talks, still, gold, a classic safe-haven asset, is reporting marginal losses at the time of writing.

The US President Trump's initial round of tariffs on China came into effect at 04:01 GMT today. Further, Trump has threatened to impose additional tariffs on $500 billion worth of Chinese goods if China retaliates.

As per latest reports, China has vowed to respond immediately in kind. Clearly, the US and China are in for a long drawn out trade war. However, there are no signs of stress in the market.  

At press time, the S&P 500 futures are flat and oil prices are reporting marginal losses. Consequently, gold has not picked up a safe haven bid, but has trimmed losses. Currently, it is trading at $1,255, having hit a low of $1,252 earlier today.

Gold's dull response to US-China trade war makes it more vulnerable to gyrations in the US yields and the US dollar. Should the US non-farm payrolls and wage growth numbers, scheduled for release at 12:30 GMT, beat estimates, the yellow metal could take a beating.

Gold Technical Levels

Resistance: $1,261 (July 4 high), $1,265 (4H 100MA), $1,281 (4H 200MA).

Support: $1,252 (4H 50MA), $1,244 (June 28 low), $1,238 (July 3 low).