Gold buoyed by North Korea tensions, United States inflation data

The Nikkei slumped to its lowest three-month close following US President Donald Trump’s apocalyptic North Korea warning. Reuters

The Nikkei slumped to its lowest three-month close following US President Donald Trump’s apocalyptic North Korea warning. Reuters

NEW YORK, Aug 10 (Reuters) - Stocks around the world fell sharply on Thursday and investors moved into the yen, gold and other safe-haven assets amid more aggressive talk between the United States and North Korea.

The Japanese yen hit an eight-week high against the USA dollar, and US -traded Nikkei stock futures dropped 2 percent to their lowest since mid May.

Foreign investors offloaded shares worth more than 648 billion won (US$566 million), while institutions scooped up more than 678 billion won.

Meanwhile, gold demand in India remained sluggish this week as local prices jumped to their highest level in almost three months and a rally in global prices dampened fresh buying elsewhere in Asia. The Korean won fell against the USA dollar.

Heightened tensions between North Korea and the USA are negative factors in the local stock markets that could drag down the index, Cape Investment & Securities said in a report.

United States gold futures for December delivery was mostly unchanged at $1,290.50 per ounce. The broader index closed at 2,319.71 points on Friday, down 3.1 percent from a week ago.

Below that level lies another key support level for the dollar on technical charts at 108.13 yen, a trough the greenback touched in mid-April.

"Risk-off sentiment dominates Asian markets into the end of the week with President Donald Trump's words still sending shockwaves into the markets", said Jingyi Pan, market strategist at online trader IG. "If you look at the gold price after the CPI (inflation) data, it tells you that the Fed is not going to be in any rush to increase the interest rate this year", said Naeem Aslam, chief market analyst at Think Markets.

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The dollar index, which measures the US currency against a basket of other major currencies, fell 0.14 percent.

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

The 30-year bond last rose 28/32 in price to yield 2.7759 percent, from 2.818 percent late on Wednesday.

Cape Investment & Securities said it expected the benchmark Korea Composite Stock Price Index to trade at the 2,300-2,360 range next week.

Crude oil prices tumbled on the back of the selloff on Wall Street and lingering concerns over global oversupply.

Spot gold inched down 0.1 per cent to $1,284.64 per ounce as of 0616 GMT, but was set for a weekly gain of over 2 per cent.

"Gold and silver are higher, thanks mainly to their status as safe-haven commodities".

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