Gold futures trimmed early gains on Tuesday as U.S. Treasury yields rose, although a weaker dollar and escalating trade tensions between the U.S. and China helped support prices.

U.S. equities and bonds fell following large swings, while bullion erased gains of as much as 1.3%, after the White House said President Trump will move forward with tariffs that would amount to 104% on many Chinese goods.

Benchmark 10-year note yields rose to a one-week high, making non-yielding gold less attractive; at the same time, the dollar index fell against its rivals, making bullion less expensive for other currency holders.

Gold has been dropping along with other asset classes since Trump announced global tariffs last week, and despite being a traditional safe-haven asset in times of uncertainty, it is "not immune to liquidity-driven global derisking events," MKS Pamp head of research and metals strategy Nicky Shiels said.

But Shiels also said fears of stagflation in the economy, with upside risk to inflation and downside risk to growth, should provide bullish support to gold prices going forward.

Front-month Comex gold (XAUUSD:CUR) for April delivery finished +0.6% to $2,968.40/oz, snapping a three-session losing streak, and front-month April silver (XAGUSD:CUR) settled +0.3% to $29.592/oz for a second straight daily gain.

ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (RING), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)

Despite the current downward correction, gold remains a first-rate asset, ActivTrades’ Ion Jauregui said, with tariff policies set to generate inflation and increase economic uncertainty, forcing banks and large investors to rethink their strategies, which should drive up interest in gold as a refuge against the devaluation of other assets.

The convergence of factors including tariff uncertainty, rising inflation and intensifying geopolitical concerns suggests bullion could reach, or even exceed $4,000/oz as the increasing money supply pushes the valuation of the metal, Jauregui added.