The risk-off sentiment saw heightened demand for safe-haven Treasurys, with the U.S. 10-year government bond yield falling through 1.55 percent, for the first time since September 2012.
U.S. stocks fell sharply as investors awoke to a massive global selloff.
Gold, which is seen as an inflation hedge and a defensive asset in times of economic stress, surged to its highest level in over eight months, following speculation that the Federal Reserve could find it tough to raise interest rates further this year. Spot gold gained nearly 5 percent to trade around $1,256 per troy ounce.
Dollar weakness also helped support the yellow metal, as the Japanese yen jumped 2 percent to its strongest in 15 months, touching 110.99 yen against the greenback on Thursday.
"This is where I get very worried, if we are saying it (dollar-yen) is a safe haven trade. The move in the dollar, to me is beginning to inform me that perhaps the U.S. market is pricing in a much worse outcome for the U.S. economy now, than it was 3 weeks," said senior independent client adviser at Nomura, Bob Janjuah.