* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* European stocks rise as risk appetite gradually returns
* Nikkei skids 1 pct as yen climbs to five-month peak
* Gold holds gains, U.S. Treasury yields at lows for the year
* Oil at highest in five weeks with eyes on OPEC
By Marc Jones
LONDON, April 12 (Reuters) - Investors edged back into European stocks on higher oil prices and hopes of positive earnings on Wednesday, but gold, the yen and low-risk bonds all held at multi-month highs as geopolitical tensions from the Middle East to the Korean peninsula simmered.
The unease tarnished an otherwise brightening outlook for global economic growth and meant oil's best run since August went almost under the radar.
Wall Street's main S&P 500 and Dow Jones markets started fractionally lower and Europe's STOXX 600 halved it 0.5 percent morning gain to dash hopes of its best day of the month.
"It is a modest rebound," said Rabobank strategist Philip Marey. "We have discounted much of the news like the conflict between the Americans and the Russian on Syria and Trump's tweets on North Korea, so maybe it's time to move on."
It was by no means quiet though. Russian President Vladimir Putin said trust had eroded between the United States and Russia under President Donald Trump, as Moscow delivered an unusually hostile reception to U.S. Secretary of State Rex Tillerson in a face-off over Syria.
Wall Street's slow start was compounded by a lack of top tier economic data and as they kept moves tight ahead of the start of first quarter earnings season on Thursday.
While much of Europe was still in posititve territory, London's FTSE was back in the red. Japan's Nikkei had also slid 1 percent overnight as a rising yen weighed on exporters' shares.
Shanghai had also closed down 0.4 percent as China reported a slight slowdown in producer price inflation.
In contrast, gold climbed as far as $1,280.30 at one stage, its highest since Nov. 10, as was only a touch lower at $1,274.61 as U.S. trading loomed.
"A degree of uncertainty has found its way into previously seemingly bulletproof financial markets," wrote analysts at ANZ.
"There is clearly some nervousness out there, with tensions around North Korea ratcheting higher and adding to an already heightened geopolitical environment. Global cyclical assets have not yet responded, but that can't last."
Chinese President Xi Jinping on Wednesday stressed the need for a peaceful solution for the Korean peninsula on a call with Trump.
North Korea has warned of a nuclear attack on the United States at any sign of aggression as a U.S. Navy strike group steamed toward the Korean peninsula - a force Trump described as an "armada". Japan's navy also plans joint drills with the U.S. force, sources told Reuters.
Trump said in a tweet that North Korea was "looking for trouble" and the United States would "solve the problem" with or without China's help.
The bellicose language has dragged South Korean stocks and the won to four-week lows and caused jitters across Asia.
At the same time, Tillerson was in Moscow to denounce Russian support for Syria's Bashar al-Assad, raising the stakes in the Middle East.
A joint news conference by Trump and NATO Secretary General Jens Stoltenberg was also likely to generate headlines.
The yen, a favoured harbour in times of stress due to Japan's position as the world's largest creditor nation, also consolidated its recent gains having surged over 1.2 percent against the dollar on Tuesday.
The dollar huddled at 109.56 yen, having been as low as 109.35 at one stage. Dealers warned there was little in the way of chart support until the 200-day moving average at 108.72.
The euro remained soft too having dropped to its lowest in five months at 115.91 yen overnight. It had staged a brief rally but that gave way and it was back on track for its 12 straight session of losses, a record for the single currency. It was steadier against the dollar at $1.0602.
Political uncertainty in France added to the euro's woes as hard-left candidate Jean-Luc Melenchon surged in the polls ahead of the May presidential election.
All this unease boosted bonds with yields on 10-year Treasuries boasting their lowest close of the year on Tuesday. Yields were last at 2.29 percent and testing a hugely important barrier on the charts.
European yields began to sink again too having been prodded higher as around 15 billion euros of morning debt sales had weighed on risk-averse, holiday-thinned markets.
Wall Street's futures prices bobbed around as investors wagered on an upbeat earnings season, which kicks off this week with a handful of banks.
Analysts expect earnings for all S&P 500 companies to have risen 10 percent in the first quarter from a year ago, according to Thomson Reuters data.
Oil's winning streak got an added lift from reports Saudi Arabia was lobbying OPEC and other producers to extend a production cut beyond the first half of 2017.
Global benchmark Brent edged up 30 cents to $56.53 a barrel, while U.S. crude added 25 cents to $53.66. If sustained, this would be the longest stretch of gains since August 2016.
Additional reporting by Wayne Cole in Sydney; Editing by Alison Williams