US President Donald Trump issued a new threat to North Korea, saying American weapons were "locked and loaded" as Pyongyang accused him of driving the Korean Peninsula to the brink of nuclear war.
The CBOE volatility index extends advance after Thursday's spike while the "Fear Gauge" is now at its highest point since the November election.
U.S. President Donald Trump's warning North Korea faced "fire and fury" if it threatened the United States and Pyongyang's response that it was considering a missile strike have sent investors scurrying out of stock markets and the dollar and into perceived safe havens such as the yen, the Swiss franc, government debt and gold. The Dow Jones Industrial Average .dji fell 204.69 points, or 0.93 percent, to close at 21,844.01, the S&P 500 .spx lost 35.81 points, or 1.45 percent, to 2,438.21 and the Nasdaq Composite .ixic dropped 135.46 points, or 2.13 percent, to 6,216.87.
The U.S. North-Korea tensions add to investor angst that has helped push up gold more than 10 percent this year, even with equities hitting records and the Federal Reserve keen to shrink its balance sheet. Core prices had been expected to rise by 0.2%.
Spot gold added 0.4 percent to $1,265.18 an ounce, pulling away from the previous session's two-week lows.
An index of 15 gold miners tracked by Bloomberg Intelligence climbed 1.1 percent, led by Toronto-based Yamana Gold Inc. The major index futures are now pointing to a modestly higher open for the markets, with the Dow futures up by 21 points.
European markets also slid in early trade after Wall Street indices suffered their biggest losses in almost three months Thursday, while the dollar struggled to recover from eight-week lows below 109 yen as investors fled to safe haven assets.
USA gold futures gained 0.2% to $1,292.70. The index dropped to a one-month closing low.
The broader Topix shed 0.65 point to 1,617.25, while the JPX-Nikkei Index 400 shed 8.16 points, or 0.1 percent, to end at 14,367.56.
In Europe, the pan-continental STOXX 600 index fell 0.9 percent, with falls deepening after a auto rammed a group of soldiers in Paris, injuring six, in what officials said was a suspected terrorist attack.
Benchmark 10-year notes last rose 5/32 in price to yield 2.2255 per cent, from 2.242 per cent late on Wednesday.
The data comes amid tepid inflation that has remained below the Fed's 2 percent target, despite low unemployment.
The market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon. Brent, the global benchmark, was last down 25 cents a barrel at $51.89.
Traders snapped up shares in companies that delivered strong quarterly results. The dollar notched a two-month trough on the safe-haven Japanese yen and was last down 0.3 percent at 109.99. Against the euro, the dollar is valued at $1.826 compared to yesterday's $1.1772.