Global shares skidded further from five-month peaks on Friday as a bounce back in European business activity did little to ease the jitters surrounding Sino-U.S. tensions, while gold approached a record high.

Earlier this week, Trump administration found a new way to provoke China by demanding China to shut down its consulate in Houston, China later retaliated and ordered the United States to close its consulate in Chengdu.

"An escalation in U.S.-China tensions that could have hugely negative consequences on stock market leadership, particularly around the US tech giants, is worrying," said International markets analysis and insights from Stephen Innes, Chief Global Market Strategist at AxiCorp.

"Even more so, if President Trump pulls the free pass into China, and things could turn quite ugly into the weekend as traders will have no option but pare risk."

Technology stocks led losses, following their U.S. peers overnight, while the China-sensitive basic materials sector lost 2.4 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 1.9 percent. Tokyo was closed for a holiday, but Nikkei futures were trading 1 percent lower.

E-Mini futures for the S&P 500 edged down 0.8 percent.

European shares were on course for their worst day in a month, with the pan-region Euro Stoxx 50 down 1.9 percent.

The market's dogged optimism on economic recovery had been challenged on Thursday by data showing the number of Americans filing for unemployment benefits unexpectedly rose last week for the first time in nearly four months.

The combination of super-loose money and negative real bond yields has burnished the attractiveness of gold, which pays no yield but is supply constrained.

The precious metal was last at 1,894.23 U.S. dollars an ounce for its biggest weekly gain in more than three months as it held firm near a nine-year high.

Analysts at RBC Capital Markets noted gold-backed exchange traded product holdings had already reached record peaks.

"The level of COVID-19 uncertainty, low and negative real and nominal rates, politics and geopolitics have driven gold prices sharply higher, and pushed allocations among investors ever higher," they said in a note.

Oil prices were ending the week on a flat note, having failed to hold a five-month high as worries about global demand offset a weaker U.S. dollar.

Brent crude was down 1 cent at 43.30 U.S. dollars a barrel, while U.S. West Texas Intermediate (WTI) crude up 1 cent at 41.08 U.S. dollars.