The price of gold, a safe-haven asset, hit its highest levels in two months as North Korea and the United States exchanged more threats, with North Korea outlining detailed plans for a missile strike near the Pacific territory of Guam.
Gains among technology companies helped snap a three-day losing streak for US stocks Friday, though the market ended with its worst weekly loss since March. 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. The S&P hasn't moved more than 0.5 percent in one day since July and has fallen more than 1 percent only twice this year. The tech-heavy Nasdaq composite lost 2.1 percent to 6,216.87.
Investors fled to gold on Wednesday as tensions between North Korea and U.S. reached a recent peak, pushing the precious metal's price to an intraday high of $1276.2/oz. "Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore.
Gold prices gained $2.60 to $1,292.70 U.S.an ounce.
But according to ICBC Standard Bank's Yuichi Ikemizu, the dollar is still weak and on a downtrend, which could help gold prices inch higher in the short term.
"The war of words taking place between the USA and North Korea at the moment, which includes very real threats of action, is taking its toll on investor sentiment".
Sterling was last trading at $1.3007, up 0.25 percent on the day.
The Nasdaq Composite was up 19.35 points, or 0.31%, at 6 236.22.
Politics also lifted USA defence stocks.
The pan-European FTSEurofirst 300 index lost 1.19 per cent.
Benchmark US 10-year notes last rose 6/32 in price to yield 2.1905 per cent, from 2.211 per cent late on Thursday. Netflix also fell, giving up $3.19, or 1.8 percent, to $175.17.
Trump issued a new warning to Pyongyang yesterday, saying in a tweet: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely". That "looks high enough to be consistent with a 5 percent-plus pace for real GDP growth", said Jim O'Sullivan of High Frequency Economics in a report.
CURRENCIES: The dollar fell to 109.97 yen from 110.48 yen late Tuesday.