Gold prices rose on Monday as U.S. President Donald Trump's threat to impose tariffs on China over the coronavirus crisis overshadowed optimism about economies easing lockdown measures, driving investors away from riskier assets.
Spot gold was up 0.3% at $1,703.95 per ounce by 1113 GMT. U.S. gold futures rose 0.8% to $1,714.30.
"The tensions which are building related to the outbreak of coronavirus are just another example of this ceremonial tussle between the U.S. and China," he said, adding that the rising tensions between the two could turn out to be positive for gold.
European stock markets and oil prices fell as the spat between top U.S. officials and China over the origin of the coronavirus fuelled fears of a new trade war.
Gold prices jumped more than 1% on Friday, recovering from a near two-week low after Trump threatened to impose tariffs on China as he considers ways to retaliate for the spread of the coronavirus out of Wuhan, China.
Adding to that, Secretary of State Mike Pompeo said on Sunday there was "a significant amount of evidence" that the new coronavirus emerged from a Chinese laboratory but did not dispute U.S. intelligence agencies' conclusion that it was not man-made.
"Overall gold is clearly performing its safe haven asset role in a market where volatility remains high and the next bear movement for stocks could be just around the corner if the virus comes back with a second wave," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
More than 3.52 million people have been infected by the coronavirus, and central banks and governments around the world have announced massive fiscal and monetary measures to limit economic damage caused by the virus outbreak.
Gold tends to benefit from widespread stimulus measures from central banks, as it is often seen as a hedge against inflation and currency debasement.
Indicative of sentiment, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD, rose 1.1% to 1,067.90 tonnes on Friday.
Last week, gold registered its worst week in more than a month as many countries moved to restart their economies and hopes of a treatment for COVID-19 lifted market sentiment.
Meanwhile, safe-haven gains for the U.S. dollar limited gold's advance on Monday, with the dollar index gaining 0.3% against its rivals.
Elsewhere, palladium gained 0.4% to $1,907.74 per ounce, platinum rose 0.5% to $764.19 and silver was steady at $14.94.
(Reporting by Brijesh Patel in Bengaluru; Editing by Kirsten Donovan and Louise Heavens) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.firstname.lastname@example.org))