Gold settles at 2-month high amid geopolitical tensions

The pan-European FTSEurofirst 300 index rose 0.18 percent and MSCI’s gauge of stocks across the globe shed 0.19 percent after touching a record intraday high.

The sabre rattling sent tremors throughout stock markets globally as investors responded to rising geopolitical tensions by selling off stocks and moving to traditional safe havens such as gold and U.S. government bonds.

USA producer prices unexpectedly recorded their biggest drop in almost a year, and the number of Americans filing for unemployment benefits unexpectedly rose last week.

The Nasdaq, Wall Street’s home to many high profile tech companies, finished the day down more than 2%.

The all-important July inflation numbers out of the U.S. failed to satisfy dollar bulls’ hopes of strongly putting a Fed rate hike later in the year back on the table.

The CBOE Volatility Index, better known as the VIX and the most widely-followed barometer of expected near-term stock market volatility, closed at 10.96, its highest in about a month.

Trump issued a new tweet-warning to Pyongyang on Friday: “Military solutions are now fully in place, locked and loaded, should North Korea act unwisely”.

The latest round of tensions began after U.S. President Donald Trump on Tuesday warned North Korea that it would face “fire and fury” if it threatened the United States.

“There’s not a great incentive to buy big”, said Lerner of SunTrust Advisery. It is heading for a 2.5 percent drop for the week.

USA stock index futures fell, with the S&P 500 indicated to open down 0.4 percent after share prices fell in Europe and Asia.

London’s FTSE 100 dipped by about 90 points, or more than 1%, in morning trading on Friday, adding to a slump of more than 100 points the day before and taking it to its lowest level since May.

South Korea’s KOSPI fell 1.8 per cent to an 11-1/2-week low, but its losses for the week are a relatively modest 3.2 per cent.

“Traders should closely watch global equities today, with further falls and risk aversion likely pumping more safe-haven flows into precious metals”, said Jeffrey Halley, a senior market analyst at OANDA.

“The war of words taking place between the United States and North Korea at the moment, which includes very real threats of action, is taking its toll on investor sentiment”. Spot gold reached a two-month high. Japan is the world’s biggest creditor country and there is an assumption investors there will repatriate funds in a crisis.

The Korean won also continued to skid, sliding 0.4 percent to 1,146.2, below its 200-day moving average.

The dollar was further weighed down yesterday by the soft U.S. inflation data.

Semiconductor, computer hardware, oil service, and retail stocks also saw considerable weakness, moving lower along with most of the other major sectors.

Global benchmark Brent also lost 0.9 percent to $51.44, after Thursday’s 1.5 percent drop. It was down 0.2 percent at 108.96 yen, after retreating 0.7 percent on Thursday.

U.S. Treasury long-dated yields dropped to six-week lows, pressured by U.S.