Gold prices edged up on Tuesday, hovering near a three-month high hit in the previous session, as global slowdown worries driven by trade conflicts amid expectations of a US interest rate cut stoked investors towards the safe-haven bullion.

Spot gold was up 0.2% at $1,326.85 per ounce, as of 0703 GMT, after touching its highest since Feb. 27 at $1,327.90 in the previous session.

US gold futures were up 0.3% at $1,331.30 an ounce.

“Weak sentiment around the breakdown in U.S.-China trade relationship has seen investors seek safe-haven assets,” ANZ analyst Daniel Hynes said.

Also, “weakness in equity markets and clearly the indications of a rate cut in the US has seen gold come to fore, which has driven investors back into to the gold market.” US Secretary of State Mike Pompeo said on Monday the United States is seeking to “level the playing field” with China after decades of unfair trade practices, but his Dutch counterpart said tariffs would hurt international trade.

The prolonged trade war between the world’s biggest economies has rolled over financial markets denting risk sentiment among investors. Global stock markets shed over $2 trillion in value in May.

Lingering global trade uncertainty is weighing upon equity markets and is likely to see participants move into safe-haven assets, MKS PAM Group said in a note.

“This is likely to drive gold higher over the near-term, with initial targets extending toward $1,330 and beyond the February high of $1,346.80, while the short-term key for the metal will be the continued ETF and hedge fund interest.” Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 2.2% on Monday, its biggest one-day percentage gain since July 2016, as investors spooked by global slowdown fears sought safe havens.

Reuters