Sales of gold bars rising amid rising tension on peninsula

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SINGAPORE, Aug 11 (Reuters) - Asian equity markets extended a global slide on Friday as tensions ramped up between the United States and North Korea, sending investors fleeing to less risky assets such the yen and the Swiss franc.

Traders across the globe reacted with dismay to Trump's warning Thursday that his earlier threat to unleash "fire and fury" on the reclusive nuclear-armed state may not have been "tough enough".

The CBOE Volatility Index .VIX , a barometer of expected near-term stock market volatility, closed at its highest since the election.

Flight-to-safety moves pushed up the value of classic assets perceived as safe, including the franc, the Japanese yen and gold prices after North Korean leader Kim Jong Un made an explicit threat to strike a USA military base in Guam. "If such an event happens, the market reaction is likely to be far more pronounced". The Russell 2000 index of smaller-company stocks gave up 10 points, or 0.8 percent, to 1,399.

"Heightened geopolitical risks overnight have seen the markets flip from risk-on to risk-off and we have to wait and see how long this move runs before adding some positions", said Viraj Patel, an FX strategist at ING.

Wall Street also focused on corporate earnings from Disney.

On Friday, an MSCI index of stocks across the globe posted its largest weekly drop since the week before Trump won the USA presidential election in November.

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

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US crude oil futures settled almost 2 per cent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers. May 17 was the last time the three indexes had a bigger single-day decline.

Gold was up $3 at $1293 an ounce, adding to 2-month highs.

Department store operator J.C. Penney (JCP) is also among the companies due to report their results before the start of trading on Friday.

Mining heavyweights BHP Billiton and Rio Tinto retreated 2-3%, while gold miners Evolution and Newcrest rose about 2% each. The yield on three-year Treasurys fell 2.0 basis points to 1.804 percent and the return on benchmark five-year government bonds shed 2.0 basis points to 2.004 percent. Hong Kong's Hang Seng Index plunged by 2 percent, while South Korea's Kospi Index slumped by 1.7 percent. "You're less than 2 per cent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

The euro was 0.45 per cent weaker at 129.125 yen and the Australian dollar slipped 0.7 per cent to 86.66 yen.

Nevertheless, traditional safe havens jumped, with the benchmark 10-year US note yield hitting its lowest level since June 28 and gold futures surging more than 1 percent.

BONDS: Bond prices were rose. The index closed at its highest level since November 8, when Trump was elected president. Australia's S&P/ASX 200 dropped 1.2 percent to 5,693.10.

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