Mubasher: Gold prices rose earlier on Tuesday as President Donald Trump’s announcement that US tariff hike on Chinese imports reignited trade tensions between Washington and Beijing, boosting safe-haven sentiment, Reuters reported.

At 7:31 am GMT, spot gold rose by 0.2% to $1,283.41 per ounce, while US gold futures went up by 0.1% to $1,284.50 per ounce.

By 8:40 am GMT, spot gold went up by 0.08% to $1,282.09 per ounce, while gold futures traded 0.12% lower at 1,282.30 per ounce.

President Trump threatened in the weekend that he will raise levies on Chinese goods, marking a shift in rhetoric from the preceding week when he hailed progress made in trade talks between both sides.

Riskier assets were dragged down from Trump’s tariff threats with vulnerable Asian equities boosting the yellow metal’s appeal as a hedge against geopolitical and global economic tensions.

“There are significant catalysts for gold with the escalations on the trade-war front yesterday, but it is surprising we have not seen a significant follow through,” SPI Asset Management trading and market strategy head Stephen Innes was quoted by Reuters.

In addition, the US is deploying a carrier strike group and bombers in the Middle East, in response to “indications and warnings” from Iran.

However, the US and China are still expected to find a common ground, as the tariff threat was believed to be used by Trump as negotiation tactic.

This also came along with confirmation from China that Vice Premier Liu He will visit Washington on 9 and 10 May to participate in bilateral trade talks with senior US officials.

“Gold did not deliver a substantial gain following the Trump tariff threat and markets may see bearish momentum accelerate if we do see a positive outcome with the talks in Washington this week,” a note by OANDA senior market analyst Edward Moya was quoted by the news agency.