(Bloomberg) -- Gold’s finally seeing some bullish momentum as trade war ructions escalate. President Donald Trump’s tariff salvo trained at Mexico boosted the metal, which has been weighed down by the strong dollar.

Bullion prices advanced to a two-week high to head for a narrow monthly gain after Trump said that he would impose a 5% tariff on Mexican goods, effective June 10, until that country stops immigrants from entering the U.S. illegally.

Gold has been struggling to make headway this year even as global tensions picked up, losing out as investors preferred the haven of U.S. Treasuries, with yields on 10-year notes at 20-month lows, and the greenback. Global equities are heading for the worst month since December and there are growing signals that an economic slowdown is imminent, with the outlook for China’s manufacturing sector deteriorating more than expected in May, according to data on Friday. The move against Mexico adds another layer of risk.

“The U.S. is demonstrating that they can weaponize trade on a whim,” Howie Lee, an economist at Oversea-Chinese Banking Corp., said in an email. “From China to Mexico, it sends a message that no country is safe. Gold is picking that up and portfolio hedging is starting to weigh on the minds of investors.”

Spot gold climbed as much as 0.4% to $1,293.15 an ounce, the highest level since May 16, and traded at $1,290.94 at 11:07 a.m. in Singapore. The precious metal is up 0.6% in May, poised to snap three months of losses.

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