(Reuters) – Gold prices rose on Tuesday as U.S. President Donald Trump’s threat to hike tariffs on Chinese imports re-kindled trade tensions between the two countries and pushed investors to seek insurance in safe-haven assets.

Spot gold was up 0.2 percent at $1,282.50 per ounce as of 0320 GMT.

U.S. gold futures were unchanged at $1,283.90 an ounce.

On Sunday, self proclaimed “tariff-man” Trump warned of a tariff hike on Chinese goods, marking a drastic change in stance from the previous week where he lauded progress made between the two countries regarding trade.

Risk sentiment was dealt a blow on the news with Asian shares wallowing near a five-week low, providing impetus to gold, which is used by investors to hedge against economic and political instability.

“There are significant catalysts for gold with the escalations on the trade-war front yesterday, but it is surprising we have not seen a significant follow through,” said Stephen Innes, head of trading and market strategy, SPI Asset Management.

Adding to global anxiety, the Trump administration is deploying a carrier strike group and bombers to the Middle East in response to troubling “indications and warnings” from Iran, widening the rift between the two countries.

“Some are also focusing on the tensions in the Middle East and the two catalysts are sufficient enough to hold prices but there is a general reluctance to push prices higher over $1,285,” Innes added.

However, a Sino-U.S. trade deal is still not off the table with Beijing confirming that it will still send a delegation to go to the United States for a trade talk.

“Gold did not deliver a substantial gain following the Trump tariff threat and (gold) markets may see bearish momentum accelerate if we do see a positive outcome with the talks in Washington this week,” OANDA senior market analyst Edward Moya said in a note.

A faction of the market still expect both U.S. and China to find common ground and believe that Trump’s tariff threat is likely a negotiation tactic.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, continued a dismal run, falling 0.16 percent to 739.64 tonnes on Monday, its lowest since Oct. 11.

Elsewhere, silver edged 0.1 percent higher at $14.91 an ounce, while platinum gained 1 percent, to $881.22 its highest in nearly a week.

Palladium rose 0.5 percent to $1,344.11 an ounce.