Gold: flatlined in Asia, risk assets draw bid on US-China trade truce

• US-China trade truce seems to have boosted risk appetite, leaving the safe haven yellow metal flatlined in Asia.
• Aussie dollar pairs have gapped higher, while the S&P 500 futures are up 1.5 percent.

Gold (XAU/USD) is trading in a sideways manner in Asia amid risk-on action in the financial markets.

The US President Donald Trump and Chinese President Xi Jinping agreed to a trade ceasefire this weekend: the US agreed to hold off imposing further tariffs on Chinese imports and in exchange China will buy "a very substantial amount" of US goods.

Both nations will also enter a 90-day period to address US concerns about intellectual property rights and forced technology transfers.

The trade truce has likely put a strong bid under the risk assets. For instance, the S&P 500 futures are up 1.25 percent. The Australian dollar, a proxy for China, gapped higher against the greenback. Further, the offshore Chinese yuan exchange rate has appreciated by 0.4 percent.

As a result, there is little incentive to bid for zero-yielding safe-haven metal like gold. As of writing, it is trading at $1,221 per Oz, down 0.10 percent on the day.

The yellow metal, however, could find takers if the FX desks begin selling dollars across the board. That, however, may not happen as a temporary pause in the US-China trade war was more or less priced-in.  As of now, the dollar index, which tracks the value of the greenback against majors, is down just 0.15 percent.

Gold Technical Levels