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Gold prices slid lower on Tuesday and diminished some of its prior gains, while US stock futures indicated recovery on Wall Street after Monday’s decline. The US stocks' recovery weakened demand for the bullion.

June Gold futures for delivery on the New York Mercantile Exchange’s Comex division dropped $5.60 or 0.42 percent to $1,341.10 per troy ounce.

During the previous sessions, participants witnessed a price rally amounting to 1.44 percent, with investor sentiment affected by the selloff in tech shares. The selloff caused Wall Street to dip, which in turn revived worries of a trade war.

Gold typically serves as a safe haven for investors in times of financial or political turmoil.

Tech shares have been under fire in the wake of concerns over Facebook’s use of data, as well as the uncertainty over the potential regulation of Amazon.

US stock futures managed to perk up, suggesting some gains on Wall Street’s opening in spite of the overnight losses in Asia and Europe.

Meanwhile, investors are still keeping close tabs on the news after China imposed additional tariffs on certain US imports. China’s move is said to fuel the fire of a trade dispute between it and the United States. This also fed the fire of concerns about dispute’s global economic impact.

The White House is expected to release a list of Chinese goods that will be subjected to new US tariffs later this week.

In other precious metals trading, silver futures slumped 0.79 percent to $16.540 per troy ounce. Platinum futures rose up 0.09 percent to $937.30. Copper futures jumped 0.36 percent to $3.061 per pound.

Gold Set to Reach Highest Levels if Trade War Breaks Out

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Gold can potentially exceed $1,400 an ounce this year due to the escalating trade tensions, according to Rick Rule, the chief executive officer of Sprott US Holdings Inc.

Investors are currently being compelled to gravitate toward safe havens, according to Rule.

“In the 40 years I’ve been involved in the gold market, the most important determinant of the gold price has been international confidence in the US dollar and in particular, the US dollar as expressed by the US 10-year Treasury,” said Rule in an interview.

“The fact that the US seems to be bound to engage in a zero-sum trade war has begun to strike people as something that’s bad for everybody in the world, not just the US. The potential for a winnerless trade war certainly gives cause to some concern,” he added.

Rule also explained that the consolidated federal, state, and local debt in the US will further contribute to the worries over the longer-term purchasing power of the dollar. Adding further to gold demands are the rising income and savings in Asia, according to Rule.

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