Gold was struggling earlier in the day as some selling pressures crept in, with gold being lumped alongside other precious and industrial metals in the early reaction to Trump’s tariffs. But with China’s response here, we’re quickly turning to focusing on retaliatory measures and that is springing gold bugs back to life in trading today.

The prospect of a trade war between the two largest economies in the world is not a welcome development. Sure, there’s a week still before all these tariffs are made official. So, there’s scope for negotiations and what not. But in a time when emotions are running high and dominating trading sentiment, it’s hard to calm down the broader market reaction.

Gold has shot up from $3,093 to $3,110 now and it also got some help with dip buyers defending the 200-hour moving average (blue line) as seen above.

As mentioned earlier, gold might be dragged through the mud alongside other precious metals so far on the week. But as the uncertainty from tariffs and all the trade conflict continues, gold still possesses qualities to outshine its peers by a long shot.

This article was written by Justin Low at www.forexlive.com.