Gold prices held firm near six-year highs on Tuesday as investors flocked to safety after the United States designated Beijing a currency manipulator, escalating protracted trade war between the world's two biggest economies.
Spot gold was steady at $1,462.50 per ounce as of 0445 GMT after hitting its highest level since May 2013, at $1,474.81, earlier in the session.
U.S. gold futures were down 0.1% to $1,475.30 an ounce.
"There have been comments that China is going to use its currency tool a bit more because they are beginning to lose their trade deal with the U.S.," said John Sharma, an economist with National Australia Bank.
U.S. Treasury Secretary Steven Mnuchin said on Monday the government had determined that Beijing was manipulating its currency, and Washington would engage with the International Monetary Fund to "to eliminate the unfair competitive advantage created by China's latest actions".
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This comes after China allowed its yuan to weaken past the key 7-per-dollar level for the first time in more than a decade, following Washington's decision to impose 10% tariffs on $300 billion of Chinese imports, ending a month-long trade truce.
Helping gold's momentum, the dollar index slipped to a two-week low, while U.S. longer-dated Treasury yields posted their biggest fall in 14 months.
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