Also adding support to gold was disappointing U.S. economic data which reduced the chances of a U.S. Federal Reserve interest rate hike later this year.
The threat of a nuclear air strike or even all-out war would be far more serious that May's stock market sell off, and we would expect the volatility surge to be higher and the stock market sell off to be larger. Of those, 52 percent delivered earnings and revenue that beat financial analysts' forecasts, according to S&P Global Market Intelligence. Hong Kong's Hang Seng dipped 1.6 percent to 27,314.74.
Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday his statement might not have been "tough enough".
Technology companies, which have been the biggest gainers this year as the market hit a succession of record highs, led the broad slide.
The latest sell-off was the most severe yet, amounting to the biggest single-day drop for the stock market in almost three months.
The dollar index, which tracks the greenback against six rival currencies, was up 0.07 percent to 93.717, after rising as high as 93.888 earlier in the session.
The benchmark S&P 500 index tumbled more than 1 percent on Thursday.
The Fed expects "very weak" United States inflation to rebound thanks to a slide in the dollar and to a labour market that keeps getting hotter, one of the Fed's most influential officials said in comments that reinforce its gradual policy-tightening plan.
The Swiss franc had rallied after U.S. President Donald Trump warned North Korea earlier this week that it would face "fire and fury" if it threatened the United States.
Tesla to test self-driving semi-truck in California, Nevada
Meanwhile, there is no official date out as of now for Tesla to conduct trials of the self-driving semi trucks in Nevada. Tesla CEO Elon Musk put out a few teasers in the spring, but had not mentioned the truck was going to be autonomous.
Pyongyang has responded that it is eyeing attacks on U.S. military bases in Guam. New York Federal Reserve President William Dudley expects sluggish US inflation to rise over the next several months.
Jobless claims increased to 244,000 in the latest week, although continuing claims declined.
10-Year Treasury Yield 2.24% -0.01%.
USA dollar, stocks slip: The dollar is weak against the pound and the yen.
Toshiba has at last reported earnings for the year ended in March, fending off a delisting for now, but the Japanese conglomerate could still be kicked out of the stock market if it cannot conclude the sale of its memory unit by the end of March.
Expectations Ahead of PPI Thursday: The market doesn't tend to focus too much on wholesale inventories, but Thursday morning brings the July Producer Price Index (PPI).
In commodities, US crude fell 0.67 percent to $49.23 per barrel and Brent was last at $52.58, down 0.23 percent on the day. The precious metal miners benefited from the flight to safety, with bullion prices hitting near two-month highs on North Korean worries.
North Korea shouldn't be written off as a "crazy, irrational actor", the professor explained, noting the US needs to come up with "practical strategies" to deal with the country.