After touching a more than two-month high at US$1,291.86, spot gold last added 0.2 per cent to US$1,288.81 an ounce. -North Korea tensions and the weak data that further reduced expectations of an interest rate hike in December.
Japanese markets were closed for a holiday, but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe was on track to post its largest weekly drop since the week before Donald Trump won the US presidential election in November.
The Nasdaq Composite was up 38.25 points, or 0.62 percent, at 6,255.12. Investors welcomed new data showing USA inflation at the consumer level inched higher last month, suggesting that the Federal Reserve may be less likely to raise interest rates next month.
The Topix index of all first-section issues edged down 0.04 percent, or 0.65 points, to 1,617.25 for a weekly loss of 0.87 percent.
"If the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said.
The North's latest threat came as U.S. President Donald Trump warned Tuesday that North Korea will be met with "fire and fury" should it stick to ambitions to hit the U.S. with ballistic missiles. Eastern time. The Dow Jones industrial average slid 120 points, or 0.5 percent, to 21,928. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.47 percent lower.
Consumer-focused stocks, media companies and banks accounted for much of the market decline.
CURRENCIES: The dollar slipped to 109.48 yen from 109.85 late Wednesday.
"From a geopolitical perspective, we understand why the escalation in tensions will have shaken some of the complacency out of investors", said Eric Wiegand, senior portfolio manager at U.S. Bank Private Client Wealth Management.More news: ASEAN hits China's reclamations, militarization
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Euro zone stocks and blue-chips also dropped 0.7 percent, while the miner-heavy FTSE underperformed and was down 0.8 percent.
Investors were also hesitant about buying smaller companies as the Russell 2000 index was down 0.05 percent on Friday, and was more than 5 percent off its July 25 record close.
Trump says North Korea "better get their act together or they are going to be in trouble like few nations have ever been in trouble".
When prices of bonds rise, yields fall.
In Europe, equities dived with London losing 0.6 percent, while Frankfurt shed 1.1 percent and Paris fell 1.4 percent.
OIL: Benchmark U.S. crude rose 23 cents to settle at $48.82 a barrel on the on the New York Mercantile Exchange.
The dollar was up 0.05 percent to 109.25 yen, after earlier falling to a sixteen-week low following data showing USA consumer prices rose less than expected in July.
South Korea's won currency dropped 0.9% against the dollar.
In commodities, USA crude fell 0.67 percent to $49.23 per barrel and Brent was last at $52.58, down 0.23 percent on the day.