(Reuters) – Gold prices climbed on Monday after U.S. President Donald Trump threatened to raise tariffs on Chinese goods, escalating Sino-U.S. trade tensions, which prompted risk-off sentiment and boosted safe-haven assets.

Spot gold was up 0.3 percent at $1,282.38 per ounce, as of 0301 GMT. U.S. gold futures were up 0.2 percent at $1,283.90 an ounce.

“We have seen a bit of a risk-averse move this morning in Asian trading following the comments from Trump over the weekend regarding the U.S.-China trade deal,” ANZ analyst Daniel Hynes said.

“Certainly that has induced some safe-haven buying in gold and has jolted the (gold) market back into action.”

United States President Donald Trump on Sunday announced he would hike tariffs on $200 billion worth of Chinese goods this week. He also said he would target a further $325 billion of Chinese goods with 25 percent tariffs “shortly”.

This is a considerable shift in stance from the past week where he heralded that trade talks between the two countries were going “pretty well”.

The comment dented Asian equities and oil prices, while boosting the yen, which like the yellow metal, is considered a safe haven during times of a geopolitical or global economic turmoil. [MKTS/GLOB] [FRX/]

According to a report by the Wall Street Journal, China now considers cancelling trade negotiations with the United States after Trump’s tariff-hike threats.

Last week, the mood among gold investors turned gloomy, pushing the metal to a four-month low after the U.S. Federal Reserve Chairman Jerome Powell dashed hopes of a rate cut this year.

In the previous session, holdings of SPDR Gold Trust, the world’s largest gold backed exchange, dropped 0.63 percent to 740.82 tonnes, its lowest since Oct. 11. [GOL/ETF]

However, the metal truncated its weekly percentage decline on Friday instigated by investors covering their short positions and a fall in the dollar after U.S. jobs data showed wage gains did not accelerate as expected.

“Having made a comeback on a weaker dollar last Friday, gold is poised to benefit strongly from safe-haven flows as investors dump stocks and rotate into bonds and precious metals,” Jeffrey Halley, a senior market analyst with OANDA, said in a note.

Physical demand for the metal had also been robust last week with India and Singapore leveraging the correction in prices ahead of a key gold-buying festival. [GOL/AS]

Elsewhere, silver slipped 0.4 percent to $14.86 per ounce, while platinum fell 1.5 percent to $856 per ounce.

Palladium dropped 1.4 percent to $1,352.51 an ounce.