* N.Korea says considering missile strike on Guam
* Trump boasts of U.S. nuclear arsenal after warning N.Korea
* Dollar falls against Swiss franc
* Platinum hits 3-1/2-month high (Updates prices; adds comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Maytaal Angel
NEW YORK/LONDON, Aug 9 (Reuters) - Gold rose to the highest in nearly two months on Wednesday, after North Korea said it is considering an attack on the U.S. Pacific territory of Guam and U.S. President Donald Trump boasted of the strength of the American nuclear arsenal. was on track for its biggest one-day rise in nearly three months.
The tensions rattled global markets, sending investors out of equities and into the safety of the Swiss franc, government debt and gold. The VIX "fear gauge" of expected volatility on the S&P 500 hit its highest in more than a month. MKTS/GLOB
"The market hates uncertainty and that's certainly what we have now," said Ole Hansen, head of commodity strategy at Saxo Bank.
"But looking ahead, unless we start to see a conflict break out or a major stock market correction, (gold) is capped at 1,295, (although) the upside at the moment is the favored direction."
Spot gold XAU= was up 1.25 percent at $1,275.98 an ounce by 2:30 p.m. EDT (1830 GMT), after reaching its highest since mid-June at 1276.10. U.S. gold futures GCcv1 for December delivery settled up 1.3 percent at $1,279.30.
The rally came after Tuesday's drop to a two-week low on better-than-expected U.S. jobs data, while investors awaited U.S. inflation figures later this week for further clues about the pace of interest rate rises.
"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," ANZ analyst Daniel Hynes said.
The dollar .DXY turned lower versus a basket of currencies Wednesday and was at a near two-week low against the Swiss franc, a traditional safe haven.
A weak greenback makes dollar-priced gold cheaper for non-U.S. investors.
"We believe continued saber-rattling ... could take gold prices higher still," said Nitesh Shah, director at ETF Securities.
Platinum XPT= gained 0.6 percent at $972.90 per ounce, having hit its highest since April 21 at $980.60.
Platinum extended its four-week rally even after South African President Jacob Zuma survived a no-confidence vote in parliament, causing the rand ZAR= to fall against the U.S. dollar.
"The weaker currency lowers the production costs for platinum mining producers," said Commerzbank (DE:CBKG) in a note. XAG= rose 2.8 percent to $16.87, on track for its biggest one-day rally since September 2016 after rising to $16.91, the highest since June 15. Spot palladium XPD= fell 1 percent to $888.30.