Gold Prices Go Up On Rising US-North Korea Tensions

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The consumer price data, which pointed to weak inflation, could cause the Federal Reserve to hold off from raising rates again this year.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, ended at a session low of 11.11 after rising as high as 12.63.

President Donald Trump says that perhaps his "fire and fury" warning to North Korea "wasn't tough enough".

Nervous investors drove shares lower earlier in the week, after President Trump declared Tuesday that the US would react with "fire and fury" to further nuclear provocations from North Korea.

"Right now the market is viewing it as a lot of saber-rattling and a lot of smoke, but not much fire", said Darrell Cronk, president of Wells Fargo Investment Institute. "Investors have a good excuse to stay on the sidelines".

The Dow Jones Industrial Average fell 94.55 points, or 0.43 percent, to 21,954.15, the S&P 500 lost 19.51 points, or 0.79 percent, to 2,454.51 and the Nasdaq Composite dropped 76.39 points, or 1.2 percent, to 6,275.94. The Russell 2000 index of smaller-company stocks gave up 13.20 points, or 0.9 percent, to 1,396.95.

This gave investors some hope at the end of a jittery week, which could show the S&P's biggest weekly loss in more than four months, primarily due to a continuous exchange of threats between the United States and North Korea. TMX Group Ltd (X.TO) was up 3.5 per cent to $68.23, while Quebecor Inc (QBRb.TO) added 2.9 per cent to $44.60. The FTSE 100 index of leading British shares was 0.6 percent lower.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday.

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The Swiss franc and Japanese yen are often sought out in times of geopolitical tension or global financial stress, partly because both countries have big current account surpluses.

The North Korea situation isn't the only thing weighing on stocks.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY. Morgan Stanley fell 70 cents, or 1.5 percent, to $45.61.

Sterling was last trading at $1.3013, up 0.30 percent on the day.

"In the event that war should break out, and that leads to an acceptance of further loose monetary and fiscal policy in the USA, we would expect a falling U.S. dollar real yield environment, giving renewed, and sustainable, impetus to monetary metals prices".

The benchmark 10-year yield fell 3 basis points to 2.25% while the two-year yield lost 2bps to 1.35%.

The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday.

Amid the hot rhetoric, US stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent.

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