Mubasher: Gold prices firmed earlier on Thursday ahead of the next round of trade talks between the US and China, Reuters reported.

However, demand for government bonds and Japanese yen (JPY) capped gains for the safe-haven yellow metal.

At 9:21 am GMT, spot gold went up by 0.29% to $1,284.54 per ounce, US gold futures rose by 0.31% to $1,285.40 per ounce.

“We are not in the flight to safety or panic mode despite the risk-averse market we are seeing right now and that’s why we are not seeing gold prices rally,” DailyFX analyst David Song was quoted by Reuters.

Gold settled near its lowest during the prior session, following an earlier leap to $1,291.39 per ounce, its highest since mid-April.

“We are watching $1,250-$1,260 levels with 200-day moving average a key factor for gold,” Song said, noting that the Japanese yen’s gain came on the back of the risk-off sentiment in global markets.

The US dollar weakened against the yen, as equities retreated and government bonds climbed in turn.

The dollar index, which traces the greenback against six major rivals, including the Japanese currency, inched down by 0.02% to 97.6070.

While gold was supported by the risk-off sentiment, prices have not been able to record a key uptrend with $1,290 levels, causing a key technical resistance.

Market players were on the edge as they focused on the kick-off of a two-day round of talks in Washington, to see if Chinese officials can manage to talk out the US possible tariff increase on Chinese imports.

The US accused China of backtracking on commitments made during trade negotiations, while President Donald Trump threatened to raise the already-implemented duties on Chinese goods from Friday, and slap new tariffs soon in the event of no deal.