18.09.201806:37:00UTC+00Gold Dips On New Trump Tariff Threat

Gold prices fell on Tuesday after the United States announced a 10 percent tariff on about $200 billion in imports from China, staring next week, in the latest escalation of trade conflict between the world's two largest economies.

Spot gold fell 0.1 percent to $1,198.79 an ounce after rising 0.6 percent in the previous session. U.S. gold futures were down 0.21 percent at $1,203.30 an ounce.

The tariffs will be set at 10 percent until the year-end, but would increase to 25 percent from January 1.

U.S. President Donald Trump also warned that he would pursue tariffs on approximately USD 267 billion of additional imports if China takes retaliatory action.

Meanwhile, China said that the United States has not been "sincere" and it has no choice but to retaliate. The statement, however, gave no timeline or details of the proposed action.

Gold is facing headwinds from the rising dollar, rising interest rates and uncertainty in global trade.

Although gold is presumed to be a safe-haven asset, the greenback has in recent months benefited from safe-haven flows.

Investors have been buying dollars in the belief that the United States has less to lose from the dispute with China, its biggest trading partner.