(Reuters) – Gold steadied on Thursday, consolidating in a tight range below the key $1,300 pivot, as Washington slapped sanctions on Chinese telecoms giant Huawei, souring optimism for a thaw in U.S-China trade tensions.

Spot gold was unchanged at $1,295.93 per ounce at 0604 GMT, moving in a narrow range of about $3.

U.S. gold futures were also steady at $1,297.40 an ounce.

“There are still a lot of underlying tensions (surrounding U.S.-China trade relations) so that might be supportive for gold,” said John Sharma, economist at National Australia Bank.

While gold’s gains may be limited by expectations of talks between the U.S. and China, the metal would still hover in the $1,280-$1,310 range, Sharma added.

Asian equities slipped after the United States hit Huawei with severe sanctions, threatening to further strain trade ties, and erasing limited gains triggered by news that U.S. President Donald Trump planned to delay implementing tariffs on auto imports.

The news on the sanctions dented hopes of a lull in the escalating trade spat, which has roiled wider markets and brought back to the fore risks of a slowdown in global growth, exacerbated by recent weak economic data from China.

It also came soon after U.S. Treasury Secretary Steven Mnuchin said he will likely travel to Beijing to continue negotiations with Chinese counterparts.

Escalations in trade tensions or economic uncertainty would make a case for gold, which is considered a safe-haven asset.

However, “gold seems to have reached a temporary detente at these levels with momentum weak to push it either way. The geopolitical premium appears to be baked into the price for now,” Jeffrey Halley, senior market analyst, Asia Pacific at OANDA said in a note.

On the technical front, spot gold is expected to test a resistance at $1,307, a break above which could lead to a gain to $1,322, according to Reuters technical analyst Wang Tao.

Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.4% to 733.23 tonnes on Wednesday. Holdings are now around its lowest levels since Oct. 9.

Among other metals, silver edged 0.1% lower to $14.78 an ounce, while palladium fell 0.7% to $1,335.71 an ounce.

Platinum edged 0.1% lower to $844.63, having touched a seven-week trough at $837.75 in the previous session.