Economy

Asian markets fall again as North Korea tensions continue

Asian markets fall again as North Korea tensions continue

At 3:25pm BST, spot gold was selling at $1,286.73 an ounce, up 0.74% or $9.43, holding firm near two-month highs for the physical market in both London and Dubai. It is trading at its best level in two months, and is threatening to crack the $US1,300 level for the first time since the day following the U.S. presidential election.

Markets had earlier stabilised as U.S. secretary of state Rex Tillerson tried to ease the tensions, saying he did not believe there is "any imminent threat" to Guam and that diplomacy would prevail.

Dow Jones Industrial Average (DJIA) futures are trading below fair value, as the tensions between the USA and North Korea amplify.

On Tuesday, U.S. President Donald Trump warned the Asian country about facing "fire and fury" if North Korea delivers more threats against the U.S.

Tokyo's Nikkei index had dropped 1.3% by the time European stock markets opened on Wednesday morning, with similar falls on the German and French bourses. The reclusive state raised the stakes further with a detailed plan to send a salvo of missiles towards the U.S. territory of Guam.

The dollar index fell 0.32 per cent, with the euro up 0.42 per cent to US$1.1819.

"North Korea doesn't seem like they're going to back down and the USA has also made a very strong stance this time". Hong Kong's Hang Seng dipped 1.1 percent to 27,444.00.

Tillerson's tone was in sharp contrast to that of USA president Donald Trump, who warned on Tuesday any North Korean threat to the United States would be met with "fire and fury".

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The dollar index (.DXY), which measures the USA currency against a basket of other major currencies, fell 0.14 percent.

"(Safe-haven demand) has settled down to a certain extent, but the market is still expecting more news to come", said Brian Lan, managing director at gold dealer GoldSilver Central in Singapore.

Another source of support to bullion was data showing US producer prices unexpectedly fell in July, pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase. The Nasdaq composite lost 0.2 percent, to 6,370.46.

If the North Korean regime "does anything" to the United States or a USA ally "things will happen to them like they never thought possible", he told reporters on Thursday, according to Bloomberg.

It was not only the threat of conflict with nuclear-ambitious North Korea. Brent crude, used to price worldwide oils, gained 10 cents to $52.24 in London. On the Nasdaq, 1,846 issues fell and 953 advanced favoring decliners.

ENERGY: Benchmark U.S. crude added 28 cents to $49.45 per barrel in electronic trading on the New York Mercantile Exchange.

And when the S&P 500 breaks a streak of 50+ trading days without a 1%+ up move, the index actually averages a decline over the next month and a gain of just 0.86% over the next three months.