Gold holds gains in Asia with North Korea tension setting the tone

Gold spikes as N. Korea ignores Trump's 'fire and fury' warning

Gold surges as US and North Korea ratchet up nuclear tensions

SINGAPORE, Aug 11 (Reuters) - Asian equity markets extended a global slide on Friday as tensions ramped up between the United States and North Korea, sending investors fleeing to less risky assets such the yen, the Swiss franc and U.S. Treasuries.

In the first four days of the week, the Standard & Poor's 500 index swung from marking its latest record high to posting its biggest single-day drop in almost three months.

The CBOE Volatility Index, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, rose the most in about 12 weeks.The index ended up 4.93 points at 16.04, the highest level since November 8, when Trump was elected president.

Trump warned North Korea again on Thursday not to strike Guam or U.S. allies, saying his earlier threat to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough.

"A pullback is good so the market doesn't get unidirectional. If you think this is just rattling sabers, and it's just words, then you could view this as a buying opportunity".

The Nasdaq Composite Index plunged 2.1% to 6216.87 and the Standard & Poor's 500 Index dropped 1.45% to 2438.21.

The escalation provided an excuse for a selloff many investors consider overdue, some investors and analysts said.

The major index futures are now pointing to a modestly higher open for the markets, with the Dow futures up by 21 points.

"The markets in general are very on edge and they're very leery about risk", Mariann Montagne, a portfolio manager at Gradient Investments, told Bloomberg.

The dollar was steady against a basket of six major currencies at 93.385 after falling 0.2 percent on Thursday, with disappointing USA inflation and jobs data adding to the greenback's woes. It slipped Friday but was up more than 50% for the week.

Despite the ongoing turmoil, investors' focus was slowly returning to the USA economy after Chicago Federal Reserve president Charles Evans said Wednesday it would be "reasonable" to announce the beginning of a reduction of the Fed's balance sheet next month.

Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 1.55 percent, its biggest one-day loss since mid-December, to leave it down 2.5 percent for the week.

Shares of Snap were down as much as 14.23 percent and hit an all-time low following a miss on revenue and daily active users. On Thursday, fellow newly public company Blue Apron Holdings lost 18% after the meal-kit maker reported rising costs amid increased competition.

Overall it has been a strong stretch for corporate profits.

The surge in gold prices come a day after the yellow metal snapped a three-day winning streak, as investors cheered USA job openings data that topped expectations suggesting the US labor market continues to strengthened, raising the prospect of the Federal Reserve hiking rates later this year.

In the latest economic data, the consumer-price index (http://www.marketwatch.com/story/us-consumer-inflation-remains-soft-in-july-cpi-shows-2017-08-11) rose a seasonally adjusted 0.1% in July, its fifth straight month of softness, raising more questions about whether inflation will eventually rise to hit the Federal Reserve's 2% annual rate target. Yields fall when bond prices rise.

A small rise in a measure of United States consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favourable to equity investors. Both are voting members this year on the Fed's rate-setting committee.

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