But while most traders appeared to favour safe-haven assets, bargain seekers helped Wall Street's three major indexes pare the day's earlier losses.
A slight recovery was seen by the London close, with the pair trading at 0.9655, down 0.86% on the day. The Russell 2000 index of smaller-company stocks gave up 13.20 points, or 0.9 percent, to 1,396.95. Major indexes in Asia closed lower.
Materials, home to gold producers and other resource-based companies, was the only gainer among the index's 10 main sectors and was up 0.6 percent.
The franc jumped 1.4 percent to 1.1272 francs per euro in early trades, its biggest daily rise in more than 2-1/2 years before settling at 1.1315.
Newsmen report that North Korea said it is considering plans for a missile strike on the U.S. Pacific territory of Guam, just hours after President Donald Trump told the North that any threat to the United States would be met with "fire and fury".
Washington has been testing its missile defenses in response to the North's stepped-up development and the current escalation of tensions could lead to pressure for the us military to try to shoot down the North's missiles in midflight if they are heading toward Guam.
For the gold price North Korea is not the only factor at play as the dollar ticks up: "We've had some competing forces play out over the past 12 hours - the U.S. dollar was stronger off economic data, but that was quickly reversed with President Trump's comments about North Korea earlier today (Wednesday)", ANZ analyst Daniel Hynes told Reuters. It rose $15.70, or 1.2 percent, to $1,277.80 an ounce.
Benchmark 10-year notes last rose 5/32 in price to yield 2.2255%, from 2.242% late on Wednesday.
While the tough talk about the potential for war is scary, investors have heard it many times before.
Gold on Thursday held steady near two-month highs hit the session before, bolstered by safe-haven demand triggered by rising tensions on the Korean peninsula.
Priceline Group dropped 8 percent after issuing a profit forecast that was weaker than analysts were expecting.
Stocks going ex-dividend included BT, Royal Dutch Shell, BP, Lloyds, and pharma companies GSK and AstraZeneca, taking around 41 points off the index. Netflix also fell, giving up $2.58, or 1.4 percent, to $175.78. US stocks also retreated (http://www.marketwatch.com/story/us-stock-futures-pull-back-as-north-korea-threatens-guam-2017-08-09), although Walt Disney Inc. shares (http://www.marketwatch.com/story/disney-and-netflix-what-the-split-means-for-viewers-2017-08-08)(DIS) were also a major source of pressure on the Dow Jones Industrial Average. Brent crude, used to price worldwide oils, gained 10 cents to $52.24 in London.