NEW YORK (Reuters) - Signs of further escalation of the U.S.-China trade war and weak UK economic data weighed on global markets on Friday, capping a volatile week that has pushed gold to its highest level in six years.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid

Safe havens like the Japanese yen gained after a report that Washington was delaying a decision about allowing some trade between U.S. companies and China’s Huawei Technologies Co Ltd again spooked Asian markets. The prospect of snap elections in Italy brought down shares across Europe, while London’s FTSE 100 index and the pound sank after Britain reported its economy shrank in the second quarter, the first contraction in seven years.

“It has been a very volatile week,” said Elwin de Groot, Rabobank’s head of macro strategy.

“Until recently, the markets’ view was that this trade war will be resolved, but clearly now the thinking is that maybe this is not the case and it could be accelerating from here,” he said.

MSCI’s gauge of stocks across the globe shed 0.53%.

On Wall Street, the Dow Jones Industrial Average fell 90.75 points, or 0.34%, to 26,287.44, the S&P 500 lost 19.42 points, or 0.66%, to 2,918.67 and the Nasdaq Composite dropped 80.02 points, or 1%, to 7,959.14.

Stock losses accelerated after U.S. President Donald Trump said he was “not ready” to make a deal with China and that the United States would continue to refrain from doing business with Huawei.

“Until we get some sort of tangible answers to what the (Trump) administration is going to do with China, this is going to be an overhang on the market, creating plenty of sharp swings,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

Benchmark 10-year Treasury notes last fell 5/32 in price to yield 1.7326%, down from 1.715% late on Thursday.

The Japanese currency rose as much as 0.4% against the dollar to 105.70 yen, nearly an eight-month high.

“The news about Huawei triggered the rise in the yen,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities. “This is a reminder that the U.S.-China trade dispute remains a risk, and this risk is not receding.”

Gold rose above $1,500, its highest in more than six years, en route to its best week since April 2016.

“The trade spat is driving the market crazy,” said Jigar Trivedi, commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers. “$1,500 (for gold) is now the new normal unless trade relations take a turn in a right direction.”

Bank of America Merrill Lynch noted that a massive $2.3 billion pile into gold funds over the last week had been the fourth-largest inflow ever.

Expectations of production cuts by the Organization of the Petroleum Exporting Countries pushed Brent crude up 1.7% to $58.34 per barrel and U.S. West Texas Intermediate (WTI) up 3.5% to $54.39.