Investing.com-- Gold prices rose in Asian trading on Tuesday, rebounding from a three-week low as investors sought safety amid escalating trade tensions between the U.S. and China.
As of 02:12 ET (06:12 GMT), Spot Gold rose 0.7% to $3,002.68 per ounce.
Gold fell below $3,000 per ounce in the previous session to hit its lowest level since March 13 as investors liquidated their positions to cover losses in other financial markets.
“Gold is traditionally a safe haven, but sometimes investors sell it along with other asset classes to cover losses elsewhere,” ING analysts said in a note.
Gold Futures expiring in June rose 1% to $3,024.0 an ounce on Monday.
Gold rises on safe-haven appeal amid growing trade tensions
The safe-haven appeal of the yellow metal was reignited after U.S. President Donald Trump on Monday threatened to impose an additional 50% tariff on Chinese goods if Beijing did not roll back its recent 34% increase on American imports.
The aggressive move fueled renewed fears of a full-blown trade war, prompting a flight to safety in gold.
In response, China’s Ministry of Commerce vowed it would “fight to the end” if Washington proceeded with the new tariffs, raising concerns over further economic disruption and triggering a risk-off mood in markets globally.
“We think gold’s selloff will be short-lived as trade and tariff uncertainty continue to bolster its safe-haven appeal,” ING analysts wrote referring to Monday’s decline.
“We believe central banks will continue to buy gold as geopolitical tensions and economic uncertainty push them to increase allocations toward safe-haven assets,” they added.
The continued weakness in the U.S. dollar, and growing bets of Federal Reserve interest rate cuts also provided support to bullion.
The US Dollar Index slipped 0.4% in Asian trading on Tuesday.
Among other precious metals, Silver Futures rose 1.3% to $29.970 an ounce, while Platinum Futures gained 0.5% to $919.0 an ounce.
Copper gains on China stimulus hopes; tariff concerns persist
Copper prices rose on Tuesday, extending gains, however, tariff concerns capped gains.
Investors hoped for China to unveil a fresh stimulus package to tackle the expected economic slowdown from Trump tariffs.
A Bloomberg report on Monday showed that China’s policymakers discussed potential steps over the weekend to shore up the economy and markets amid Trump’s tariff threats, including fast-tracking stimulus to boost consumption.
Benchmark Copper Futures on the London Metal Exchange rose 0.5% to $8,783.50 a ton, while Copper Futures expiring in May inched 0.3% lower to $4.3165 a pound.