TOKYO (Reuters) -Stocks sank in Asia on Thursday, reversing initial gains, as worries about the economic impact of President Donald Trump's trade policies overtook early optimism from a tepid reading of U.S. inflation.

Gold climbed to within $10 of its record peak and the safe-haven yen rallied, while U.S. Treasury yields turned lower. Crude oil prices also declined.

Hong Kong's Hang Seng slumped 1.4% as of 0545 GMT, and mainland Chinese blue chips slid 0.7%.

Japan's Nikkei gave up gains of as much as 1.4% to last trade flat, while Taiwanese equities dropped 1.1% and South Korea's KOSPI lost 0.4%.

Australia's stocks benchmark closed down 0.5% and is now 10% off its record peak struck on February 14, confirming a technical correction.

Futures pointed to a lower start for Wall Street at the reopen, with S&P 500 futures losing 0.5% and Nasdaq futures off 0.8%.

Pan-European STOXX 50 futures slipped 0.5%.

Beaten-down U.S. tech shares led a rebound on Wall Street on Wednesday after data showed U.S. consumer prices rose at the slowest pace since October last month.

The inflation figures were closely watched following a recent run of softer economic data, but ultimately did not capture the impact from Trump's tariff campaign.

"This, though, still strikes me as a market that simply cannot hold onto any gains at the moment, which should be a big old red flag for any potential dip buyers out there," said Michael Brown, senior research strategist at Pepperstone.

"Along with my bearish equity bias, I still favour a bullish bond view, particularly as risks increasingly tilt to the downside for the U.S. economy."

Trump's increased tariffs on all U.S. steel and aluminium imports took effect on Wednesday, stepping up a campaign to reorder global trade in favour of the U.S. and drawing swift retaliation from Canada and Europe.

"Uncertainty remains in the air as the outlook for consumer price inflation remains blurred by trade policy developments," TD Securities analysts wrote in a client note.

"The impact from the recent implementation of tariffs on Chinese, Canadian and Mexican goods and the expectation of further announcements suggest the worst is yet to come."

Gold rose 0.5% to as high as $2,947.06, closing in on the record high from February 24 at $2,956.15.

U.S. Treasury yields declined, with the two-year yield easing 2 basis points to 3.974% after rising as high as 4.005% on Wednesday.

The yen strengthened about 0.4% to 147.70 per dollar.

The euro edged 0.1% lower to $1.0879.

Crude oil eased back following Wednesday's rally. Brent futures lost 0.3% to $70.77 a barrel, while U.S. West Texas Intermediate crude futures declined 0.4% to $67.44 a barrel.