It has been a very disappointing day of trade for the Australian share market on Tuesday.
In morning trade the benchmark S&P/ASX 200 index has followed the lead of U.S. markets and is down a sizeable 1.5% to 6,204.7 points.
Why is the market sinking lower?
Investors have been hitting the sell button in a panic after the trade war between the United States and China intensified overnight.
In response to President Trump raising duties on US$200 billion of Chinese goods to 25% from 10% last week, China hit back with tariffs of its own.
According to CNBC, China has said that it will raise tariffs on US$60 billion worth of U.S. goods on June 1. The goods that have been targeted include a range of agricultural products.
There are concerns that this may not be the end of the matter, with Trump threatening to put 25% tariffs on US$325 billion worth of Chinese goods that remain untaxed.
Not everything is being sold off.
Whilst most of the market is being sold off today, one area that is surging higher is the gold industry.
Overnight the spot gold price rose over 1% to break through the key US$1,300 an ounce level. In Asian trade the precious metal has continued its ascent and is up 0.15% to US$1,303.50 an ounce.
Unsurprisingly, with investors making a flight to safety, Australian gold miners have been in demand and their shares have stormed higher.
Here is the state of play in the gold miner industry right now:
The Evolution Mining Ltd (ASX: EVN) share price has surged 7% higher.
The Newcrest Mining Limited (ASX: NCM) share price is up 2.5%.
The Northern Star Resources Ltd (ASX: NST) share price has climbed 4%.
The Regis Resources Limited (ASX: RRL) share price has risen 5%.
The Resolute Mining Limited (ASX: RSG) share price is up 2.5%.
The Saracen Mineral Holdings Limited (ASX: SAR) share price has risen 4%.
The St Barbara Ltd (ASX: SBM) share price has climbed 4%.
This strong form has led to the S&P/ASX All Ords Gold index pushing 3.7% higher this morning and demonstrates why it can be good to have a little exposure to gold on a day like this.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.