The threats came during a week of flared tempers. On Tuesday (March 11), Ontario Premier Doug Ford imposed a 25 percent surcharge on electricity exports to the US. Although the charges were withdrawn after the two sides agreed to meet in Washington on Thursday, there is still much uncertainty about Canada-US relations.

Broad 25 percent tariffs on all steel and aluminum imports to the US went into effect on Wednesday (March 12). Canada quickly applied retaliatory tariffs on US$20 billion worth of goods, while the EU responded with tariffs on US$28 billion worth of goods. Trump previously threatened to boost the tariffs on Canadian steel and aluminum to 50 percent, but backed down for the time being after Ford withdrew the 25 percent electricity surcharge.

Trump has also said he will impose further tariffs on auto imports by April 2, creating significant uncertainty for manufacturers and businesses that rely on cross-border trade.

Additional tailwinds for gold's momentum this week include the release of US consumer and producer price index data on Wednesday and Thursday, which shows that inflation has become sticky.

This news is adding more fuel to recession speculation and helping to buoy gold.