Gold inches down from near-two month high

Gladys Abbott
August 12, 2017

Stocks took a hit for a third straight day Thursday as North Korea's nuclear threats seemed again to roil the markets.

The Korean story has seen the yen gain around 1.5 percent this week, its biggest rise since mid-May.

This week, the S&P 500 started on a stronger note by rising to new record high price levels.

A spokesman for the Korean People's Army said in a statement on Wednesday it was "carefully examining" plans for a missile attack on the U.S. Pacific territory of Guam, which has a large U.S. military base.

"Unsurprisingly, the yen, which is still the second best performer in the G10 foreign exchange space, is playing second fiddle to the Swiss franc due to Japan's proximity to the epicentre in Pyongyang".

Germany's DAX dropped 0.3 percent to 12,117.07 and the CAC 40 of France lost 0.3 percent to 5,132.22.

Dow Jones Industrial Average futures were down 0.23%, S&P 500 futures fell 0.4%, and Nasdaq futures slid 0.66%.

On the economic front, data is expected to show that USA consumer prices likely rose in July after being unchanged the prior month.

The baht, regarded as safe haven, rose a bit to 33.22 against the U.S. dollar from 33.24 on Thursday.

In Toronto, the composite index S&P/TSX has lost 143,08 points, or 0.9 %, to close at 15 074,25 points, the decline being nearly generalized to all sectors.

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The Australian dollar, which rose to a 19-month high near 90 yen late in July, was down 0.6 per cent at 86.77 yen after slipping to a one-month low of 86.23 yen.

The dollar was down 0.77 percent against the yen JPY= at 109.21 yen.

The dollar was up 0.05 percent to 109.25 yen JPY=, after earlier falling to a sixteen-week low following data showing US consumer prices rose less than expected in July.

Japan is the world's biggest creditor country and there is an assumption that investors there will repatriate funds in a crisis.

In Europe, equities dived, with London losing 0.8 per cent, while Frankfurt and Paris shed 1.3 per cent and 1.8 per cent respectively. The Swiss currency was also on track for its biggest daily gain against the euro since the Swiss National Bank removed its cap on the currency in January 2015.

"More likely than anything else, the price action was a function of an overextended USA equity market that has been in need for a healthy correction off record highs", LMAX Exchange analysts said in a morning note.

U.S. Treasury yields US10YT=RR fell to as low as 2.197 percent, their lowest level since June 28, overnight.

United States gold futures gained 0.2% to $1,292.70.

In commodities, US. crude fell 0.67 per cent to $49.23 per barrel and Brent was last at $52.58, down 0.23 per cent on the day.

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