Gold prices rose on Friday and were set to post a weekly rise as the United States raised tariffs on Chinese goods, exacerbating fears of a global economic slowdown, while palladium surged more than 5% on technical buying and short covering.

The United States intensified a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods. U.S. President Donald Trump said on Friday he was in no hurry to sign a trade deal with China.

The escalation in the U.S.-China trade dispute has weighed on stock markets worldwide and boosted demand for assets viewed as safer.

“Gold is up today and will be up in the short term until there is a concrete resolution to the continuing trade tensions between the United States and China,” said Rob Lutts, chief investment officer at Cabot Wealth Management.

Spot gold gained 0.2% to $1,286.56 per ounce and is up about 0.6% so far this week.

U.S. gold futures settled up 0.2% at $1,287.40.

“Gold is kind of inching high because of instability in the equities market,” said INTL FCStone analyst Edward Meir.

Palladium climbed 4.7% to $1,354.51 per ounce as of 1:32 pm EDT (1732 GMT), having fallen to its lowest since Jan. 4 at $1,263.85 in the previous session. The metal was on track for a second straight weekly decline of about 1.2%.

“The price slide (on Thursday) temporarily made palladium cheaper than gold again for the first time since the start of the year,” Commerzbank analysts said in a note.

“The nice $70 bounce in the palladium prices is on the back of some modest consumer buying after the move below $1,300 yesterday and short-covering,” said Tai Wong, head of base and precious metals derivatives trading at BMO.

For gold, the U.S.-China trade conflict could also force the U.S. Federal Reserve to cut interest rates, which could further support bullion prices.

Global anxiety has also seen an uptick as U.S. bombers arrived at a U.S. base in Qatar to counter what Washington describes as threats from Iran.

“The Iran situation is not improving. Trump’s policies have led to a change in the dynamics. We’re not sure whether the changes will make the situation safer or not but the uncertainty will affect how investors see gold,” Lutts added.

Bullion was also supported by a weaker dollar which fell after data showed a smaller-than-expected rise in the U.S. consumer price index last month.

Silver was up 0.2% at $14.78 per ounce, while platinum rose 2.3% to $863.75.

Silver is on course to register a second straight week of declines, while platinum looks set for a third weekly drop in a row.