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The gold market is finally seeing some significant flight-to-safety buying as the sell-off in stocks accelerates. In early action Monday, the benchmark Dow Jones Industrial Average is down by some 550 points for a decline of over 2 percent. The recent string of declines has been attributed to the lack of a U.S./China trade agreement and at this point a deal, which was previously reported to be imminent, appears to be a ways off.

The lines of communication will remain open; however, it is also possible that not much happens until President Trump meets with Chinese leader Xi Jinping. The two could potentially meet at next month’s G20 summit in Japan. For the time being, however, the two nations have again ratcheted up the war on trade. Last Friday, the U.S. hikes current tariffs on $200 billion of Chinese goods from 10 percent to 25 percent. China has now retaliated, saying that it will raise tariffs on $60 billion of U.S. goods starting June 1.

In addition to stoking significant market volatility and equity declines, the effects of the ongoing war on trade may potentially benefit gold in other ways. It has been suggested that the trade war could force the Fed to cut interest rates. Such a scenario does make a great deal of sense, as the war on trade could hurt the jobs market and put a major dent in consumer spending. An increasingly dovish Fed could weigh heavily on the U.S. currency, making gold less expensive for foreign buyers. The dollar may also be negatively affected if volatility expands further. The dollar is lower today, for example, as buyers flock to the perceived safety and stability of the Japanese Yen.

Rising tensions between the U.S. and Iran could also potentially impact global markets. The conflict has called into question Iran’s commitment to the 2015 nuclear deal it signed with several UN Security Council members and Germany. President Trump pulled the U.S. out of the deal last year and has re-imposed sanctions. Iran has reportedly indicated it may resume nuclear activities if other partners go along with the sanctions. The U.S. recently dispatched a carrier group to the region and tough rhetoric between the two nations is on the rise.

The gold price is up over $11/oz in early action. The market’s technical picture has improved significantly in recent weeks and a near-term bottom may now be in place. This would seem to suggest that the market is in position to trade sideways to higher, and that any dips will be bought.

Despite an improved technical posture, however, the market will need to maintain some gains to foster further upside. The metal has been frustratingly range-bound for some time now even as U.S./China relations become increasingly strained. The bulls will need to take out psychological resistance at the $1,300 level and then take out the April high around $1,314 to really get the ball rolling.