Markets extend losses as Korea tensions escalate

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Spot gold (XAU=) added 0.7 percent to $1,286.00 an ounce.

Overnight, US hedge fund manager Ray Dalio recommended, in a post on his Linkedin page, to shift assets into gold because "prospective risks are now rising and do not appear appropriately priced in" because of a backward look at risk, high corporate leveraging and because past risks have been low.

Trump declined to say whether the USA might consider a pre-emptive strike against North Korea, but said he was still open to negotiation.

Trump ratcheted up his rhetoric against North Korea and its leader on Thursday, warning Pyongyang against attacking Guam or US allies after it disclosed plans to fire missiles over Japan to land near the US Pacific territory.

"If the US should target North Korea, it would have to deal with North Korea's nuclear weapons, and there's also the possibility for Russian Federation and China to intervene", Yang said. Pyongyang said it was examining plans for attacking Guam, a US territory in the Pacific with a military base.

At 9:34 a.m. ET (1334 GMT), the Dow Jones Industrial Average was up 54.06 points, or 0.25%, at 21 898.07, the S&P 500 was up 5.23 points, or 0.21%, at 2 443.44. It would be ideal for the precious metals if the dollar were to weaken again now, and that could happen courtesy if U.S. economic data is weaker.

ANALYST TAKE: "We're seeing significant risk aversion in the markets on Wednesday, with the escalation in tensions between the USA and North Korea triggering moves into safe haven assets", said Craig Erlam, senior market analyst at OANDA. Hong Kong's Hang Seng dipped 1.1 percent to 27,444.00.

The smaller than expected increase in consumer prices has led to optimism that the Federal Reserve will not be in a hurry to raise interest rates.

Alexis Sanchez will not play for Arsenal's Premier League opener against Leicester
Sanchez, whose current deal expires in 2018, did not play in Arsenal's victory over Chelsea in the Community Shield on Sunday. The Gunners will start the 2017-18 season with a home clash against Leicester City at the Emirates Stadium on Friday night.

Possibly due to the lack of appetite for risk in the market, the euro suffered on Thursday, down slightly against the dollar by 0.09% at 1.1749, slipping towards a two week low.

The pan-European FTSEurofirst 300 index (.FTEU3) lost 1.11 percent.

South Korea's KOSPI fell 1.7 per cent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 per cent.

"The won has recently been reacting quite sensitively to Trump's comments and investors' anxieties worsened today as the North came up with an aggressive response", said Jung Sung Yoon, a foreign exchange analyst at Hyundai Futures.

The increased geopolitical tensions this week, centred on the Korean peninsula and the nearby U.S. territory of Guam, have caused stock markets around the world to fall back as investors turn cautious.

Looking to commodities, oil prices eked out gains in early trade, however sentiment was capped as concerns linger over OPEC's ability to rein in supply.

USA crude rose 0.43 percent to $48.80 per barrel and Brent was last at $52.01, up 0.21 percent on the day.

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