Gold Up on Increased U.S.-China Tensions But Held Back by Potential Vaccine Hopes

© Reuters.

Gold was up on Tuesday morning in Asia, regaining its losses from the previous session.

Investors’ risk sentiment increased after Moderna (NASDAQ:MRNA) reported promising results on Monday from its phase one trials for its COVID-19 vaccine.

All 45 participants developed antibodies to the virus after two doses.

The improved sentiment capped gold's gains as investors retreated from the safe-haven asset.

Gold futures were up by 0.27% at $1,739.35 by 12:43 AM ET (5:43 AM GMT). Stocks, which normally have an inverse relationship with gold, were also up on Tuesday.

Investors turned to the safe-haven yellow metal as U.S.-China tensions continue to simmer, with the NASDAQ stock exchange set to implement new restrictions on Chinese IPOs.

The U.S. is also looking to encourage American companies to move operations and/or key suppliers out of China, with officials proposing tax breaks, new regulations and subsidies as enticements.

Gold has risen about 14% in 2020, with central banks rolling out unprecedented waves of rate cuts and other stimuli to combat COVID-19's economic impact.

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