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PRECIOUS-Gold hits 10-mth high in wake of N.Korea nuclear test

Sept 4 (Reuters) - Gold prices hit their highest in nearly 10 months early on Monday after North Korea's latest and most powerful nuclear test drove investors towards safe-haven assets.

FUNDAMENTALS

* Spot gold was up 0.8 percent at $1,335.31 per ounce by 0041 GMT, after earlier touching its strongest since Nov. 9 at $1,336.79.

* U.S. gold futures for December delivery were up 0.8 percent at $1,340.90.

* The Japanese yen and sovereign bonds also climbed on Monday as North Korea's nuclear test provoked the usual knee-jerk shift to safe havens, while futures pointed to a difficult day for global equities.

* North Korea on Sunday conducted its sixth nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, prompting the threat of a "massive" military response from the United States if it or its allies were threatened.

* South Korea's military said on Monday its air forces and the army carried out a missile drill early in the day in response to North Korea's nuclear test, adding the drills targeted the area where the test had been carried out.

* Trade negotiators from Canada, the United States and Mexico presented more proposals for a renewed North American Free Trade Agreement on Friday and tried to put behind them threats from U.S. President Donald Trump to pull out of the treaty.

* The European Central Bank is likely to announce a reduction of its monthly asset purchases in October, according to a majority of economists in a Reuters poll, who also said they expect the central bank to shut down the program by the end of next year.

* The European Central Bank will discuss how to initiate a careful withdrawal from its asset purchase program, rate-setter Ewald Nowotny said on Friday.

* Traders held to expectations Friday that the Federal Reserve would probably wait until the middle of 2018 before raising rates, after a government report showed employers added fewer jobs last month than expected.

DATA/EVENT AHEAD (GMT)

0830 U.K. Construction PMI Aug 0830 Euro Zone Investor sentiment index Sep 0900 Euro Zone PPI Jul

(Reporting by Apeksha Nair in Bengaluru; Editing by Joseph Radford)