GLOBAL MARKETS-Asian shares falter as U.S.-China trade war, recession worries weigh

* MSCI Asia ex-Japan -0.17%
* Gold regains some lustre near $1,500/oz
* Sterling near Jan. 2017 lows vs. dollar
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Andrew Galbraith
SHANGHAI, Aug 12 (Reuters) - Asian shares fell on Monday
morning, while gold prices held firm as investors worried a
prolonged Sino-U.S. trade war could tip the world and U.S.
economies into recession.
In early trade, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS was down 0.17%, after Wall Street
broke a three-day winning streak to end lower on Friday.
Australian shares dipped about 0.1% while the South Korean
.KS11 market clawed back from early losses to rise 0.12%.
Markets in Japan and Singapore were closed for a holiday
Monday.
U.S. shares finished lower on Friday after U.S. President
Donald Trump said that Washington was continuing trade talks
with Beijing, but that the U.S. was not going to make a deal for
now. Those comments helped to drive a late sell-off in a volatile
session that saw the Dow Jones Industrial Average .DJI fall
0.34%, the S&P 500 .SPX lose 0.66% and the Nasdaq Composite
.IXIC drop 1%.
White House trade adviser Peter Navarro subsequently said
that the United States was still planning to hold another round
of trade talks with Chinese negotiators. The uncertainty and lack of progress around the talks have
kept financial markets on edge over recent months, with
investors pulling out funds from riskier assets amid the
slowdown in global growth and corporate profits.
Worries about the damaging effects of the trade war between
the world's two biggest economies were underscored by a warning
from Goldman Sachs of the rising risk of a U.S. recession, and
that it no longer expects a trade deal before the 2020 U.S.
presidential election. Elsewhere, there was little positive news. Data last week
showed the British economy unexpectedly shrank for the first
time since 2012 in the second quarter, while German industrial
production suffered its biggest annual decline in nine years.
All of that raised global recession fears as the escalating
Sino-U.S tariff war took a toll on trade and investment.
"Cross asset correlations and money flow continue to tell
(us) that this funk in markets is a genuine result of fear and
uncertainty from traders and investors," said Greg McKenna,
strategist at McKenna Macro.
A flight to perceived safe-haven assets helped to lift the
price of gold XAU= above $1,500 last week for the first time
since April 2013. After giving up some gains on Friday, the
precious metal was higher on Monday, rising 0.18% to $1,499.52
per ounce. GOL/
In currency markets, sterling GBP=D3 matched its January
17, 2017 low against the U.S. dollar, buying as little as
$1.2015 in early Asian trade Monday before trimming losses. The
British pound last bought $1.2028.
The UK currency came under pressure on Friday after the
downbeat data on the British economy.
The dollar dropped 0.25% against the yen to 105.40 JPY= ,
while the euro EUR= edged higher to $1.1203.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, was barely changed at 97.513.
Oil prices dipped, having risen sharply on Friday on a drop
in European inventories and production cuts by the Organization
of the Petroleum Exporting Countries.
U.S. crude CLc1 was down 0.53% to $54.21 a barrel and
global benchmark Brent crude LCOc1 shed 0.51% to $58.23 per
barrel.