A batch of disappointing earnings results from big retail chains and simmering tensions between the USA and North Korea weighed on the market.
Besides, persistent buying by local jewellers at domestic spot market stoked the uptrend.
The Hang Seng Index was the top loser in the region, slumping 2%, while South Korean shares ended 1.7% lower, the Shanghai Composite Index plummeted 1.6%, Singapore's FTSE Straits Times Index ended down 1.3% - its biggest percentage loss since October 2016 - and Indonesia's Jakarta Composite plunged 1%. The company's stock (NYSE:DIS) dropped $4.15, or 3.88 per cent, to US$102.83. The precious metal had gained Rs 670 in last three days.
Most large-cap stocks were mixed across the board.
Investor focus now turns to Friday's USA consumer price index data.
"That did temporarily shake investors' complacency, but we think markets are ready to move higher in the back half of the year, and earnings and economic data are going to drive that".
Asian markets swooned from the opening bell, and closed in the red.
Another source of support to bullion was data showing US producer prices unexpectedly fell in July, pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.
The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a auto hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%.
The Standard & Poor's 500 index slipped 0.90 points, or 0.04 percent, to 2,474.02. Gold prices touched their highest level in more than two months at US$1,285.76 an ounce.
But safe havens benefited from the move away from stocks with gold rising by just under one percent after surging 1.3 percent Wednesday.
J.C. Penney sank 16.6% after the struggling department store chain reported quarterly results that fell short of Wall Street's expectations.
In other energy futures trading, wholesale gasoline rose 1 cent to $1.61 a gallon, while heating oil was little changed at $1.63 a gallon.
Smaller-company stocks also fell sharply.
USA crude oil tumbled 2% to $48.59/bbl, failing to hold above $50 as a report from OPEC showed crude production among the group's members rose in July. Like gold silver has also seen a rise, reaching a high of $17.24, before finishing 1.1% up at $17.08. Australia's S&P/ASX 200 edged down almost 0.1 percent.
A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday.