Gold up on rising US-North Korea tensions

U.S. stocks have been in retreat since President Donald Trump Tuesday issued a fiery warning to North Korea to halt its nuclear program.

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam in an unusually detailed threat that further heightened tensions with the United States.

A report released by the Commerce Department on Wednesday showed wholesale inventories in the USA rose by slightly more than expected in the month of June.

Trump continued the back-and-forth with a post on Twitter this morning indicating that the U.S. is prepared to take military action against North Korea.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize. Industrial output in the United Kingdom rose by 0.5% month-on-month in June, beating expectations of a 0.1% increase.

The benchmark 10-year yield jumped to trade at 2.28% after the jobs openings and labour turnover survey showed a record number of job openings for June.

"The market has been looking for an excuse to sell off and North Korea and the president gave the market that excuse", said David Schiegoleit, managing director at the U.S. Bank Private Client Wealth Management.

"Starting late July, foreigners began profit-taking that focused on information and technology stocks", said Kim Young-jun, a senior researcher at Kyobo Securities Co. The single currency fell to a more than one-week low of $1.1687 yesterday before rebounding to a high of $1.1769 in Asian trading today. The euro zone's version is at its highest since April, when France's election was rattling the region.

The Standard & Poor's 500 index lost 35.81 points, or 1.4 percent, to 2,438.21.

Still, it could be healthy for the market to take a breather after all these records.

Netflix also fell, giving up $2.58, or 1.4 percent, to $175.78.

The headline US CPI release was below consensus forecasts with a 0.1% increase for July compared with an expected 0.2% with the year-on-year rate at 1.7%.

Spot gold rose 0.3 percent to $1,264.50 per ounce at 0324 GMT, while US gold futures for December delivery rose 0.6 percent to $1,270.40 per ounce. Chinese blue chips closed flat but Hong Kong's Hang Seng fell 0.4 per cent. "Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore.

Falling crude prices made oil & gas stocks a weight too, dropping 1 percent with Tullow Oil the top faller.

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

Crude futures meanwhile extended losses on fears of slowing demand and lingering concerns over global oversupply.

The dollar weakened after news that USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

Shares of Kohl's Corporation surged 7% in premarket trading Thursday before giving up those gains, after the retailer reported earnings that beat Wall Street estimates. Britain's FTSE 100 sank 1.4 percent.

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