Gold Inches Toward $1300 Ahead Of Inflation Data

Donald Trump's 'fire and fury' warning sends stock markets lower, but lifts gold

Simmering tensions with North Korea were also weighing on the market in early trading Thursday.

The ongoing political crisis that has seen North Korea state it was seeking to strike the US Pacific island territory of Guam within days, prompted gold speculator Dennis Gartman, editor and publisher of The Gartman Letter to say he believed gold was on the cusp on a significant break out.

It was 0.2 percent lower at 1.1310 francs, compared with highs of 1.1537 francs hit a week ago.

Dow e-minis were down 24 points, or 0.11 percent, with 22,166 contracts changing hands.

Gold prices closed up around 1.48% at $1,281.30 per ounce on Wednesday.

On Thursday, U.S. President Donald Trump said his earlier threat to unleash "fire and fury" on North Korea "maybe wasn't tough enough".

Trump continued the back-and-forth with a post on Twitter this morning indicating that the United States is prepared to take military action against North Korea. At least 12 brokerages cut their price targets on the stock. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March. Broadcom gave up $5.72, or 2.3 percent, to $243.45.

Retailers were also falling Thursday.

France's CAC dropped 1.6% and Germany's DAX fell 1.3%.

RETAIL SLUMP: Disappointing quarterly results from big department store chains put investors in a selling mood. Its shares tumbled $11.35 to $61.99.

BONDS: Bond prices rose.

"Where the current tensions escalate sharply, we would expect an acceleration of this week's price action, i.e. a sharp rise in risk premiums across asset classes, substantial falls in USA and German government bonds yields, significant JPY and CHF strength and a massive sell-off in equities, particularly in Europe which is more linked into the global cycle". Look no further than the TICK index, a measure of the number of New York Stock Exchange issues trading on an uptick versus a downtick at any given moment. It added 39 cents to $49.56 a barrel on Wednesday.

USA crude rose 0.41 per cent to US$48.79 per barrel and Brent was last at US$52.01, up 0.21 per cent.

On the currency front, the U.S. dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday. Yesterday, the TICK opened at around 900-a reading of 1,000 or more means pretty severe selling pressure-and then headed higher throughout the day.

MARKETS OVERSEAS: Major indexes in Europe were headed lower. Britain's FTSE 100 sank 1.3 percent.

In Asia, benchmarks in Hong Kong and South Korea-which had been one of the best performers of 2017-closed down 2% and 1.7% respectively, Friday, putting the week's drop at 2.5% and 3.2%.

The pan-European FTSEurofirst 300 index lost 1.06 percent and MSCI's gauge of stocks across the globe shed 0.17 percent.

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