Gold prices have weakened early on Tuesday as a risk-on sentiment returns to markets over rising expectations of economies reopening in parts of the world following the coronavirus pandemic. At the time of writing, GOLD is trading at a little above $1,698.

The safe haven appeal of gold has come under pressure as countries like Italy, Spain, Portugal, Australia and New Zealand prepare to resume economic activity after bringing the spread of the virus under control. The yellow metal has also weakened after US equities staged a rally on Monday as markets anticipated reopening of economies across some US states as well.

However, the weakness in gold remains limited over worries of escalating tensions between the US and China after Trump stepped up his attacks alleging that China concealed the severity of the coronavirus outbreak initially from the world. Markets are wary that Trump could restart the trade war with China as he has threatened to impose more tariffs as punishment.

In addition, economic data releases from around the world continue to reinforce fears of a downturn in the global economy in the wake of the crisis. One of the latest data releases from the US reveals a steep fall in manufacturing orders during March and a possibility of worse figures for April as a result of the shutdown across the country and most of the world.