On Tuesday, gold prices are strengthening and trading bullish after gaining around 1% during the previous session as a result of the risk-off mood in markets amid worries of a second wave of coronavirus and rising US-China tensions. At the time of writing, GOLD is trading at a little above $1,751.

The safe haven appeal of gold was boosted after a record increase in the daily reported infections worldwide on Sunday. A higher number of cases are being reported across several states in the US and even in countries like Brazil, Germany and Australia, increasing fears that the reopening of economies has caused a second wave which could prompt governments to reimpose lockdown measures all over again.

In early trading today, gold prices received additional support from White House trade adviser Peter Navarro’s statements about the trade deal between the US and China ending, even as relations between the two countries sour over the Trump administration blaming China for not doing enough to stop the coronavirus outbreak from turning into a global pandemic. Markets are worried that an escalation of tensions between the two world leaders could severely impact global economic recovery in the aftermath of the pandemic.

The yellow metal is also in favor amid recent comments from Fed officials who have cautioned that economic recovery in the US could take longer than previously anticipated. They have also warned that any resurgence in the pandemic could send unemployment levels soaring all over again, which could further delay recovery.