Early on Tuesday, gold prices are trading bullish, climbing higher as worries about rising US-China tensions and the global economic outlook weigh on the sentiment, even as economies look to reopen soon. At the time of writing, GOLD is trading at a little above $1,736.

During the previous session, gold prices declined 0.5% after touching the highest level seen in over seven years over optimistic reports about a vaccine by Moderna offering promising results in trials. This development helped improve the risk appetite in global financial markets, sending equities and oil prices higher and denting the safe haven appeal of gold.

Meanwhile, the weakness in gold prices remains limited owing to a possible escalation in friction between the US and China, after reports emerged that Nasdaq is looking to introduce new rules to restrict Chinese companies’ IPOs from being listed. The US government is also exploring ways to encourage American businesses from reducing their dependencies on China and moving their operations out of China.

The yellow metal’s safe haven appeal also remains supported over continued worries about the economic fallout from the coronavirus pandemic. The IMF has cautioned once again that economic recovery in the aftermath of the crisis could take much longer than previously forecast.