The most active gold contract for December delivery went up 8.7 U.S. dollars, or 0.58 percent, to settle at 1,517.20 dollars per ounce.
The precious metal extended rally during the ensuing electronic trading, with double-digit gains.
Trade tensions between the United States and China, and downbeat outlook of global growth with many central banks cutting key interest rates, prompted investors to dump risky assets and flock to gold, said analysts.
The Dow Jones Industrial Average, S&P 500 and Nasdaq, all benchmark indexes, fell significantly on Monday. Additional support came from the U.S. dollar index, a gauge of the greenback against a basket of other major currencies, which also eased.
When the dollar softens, dollar-priced gold usually rises, as it becomes less expensive for investors holding other currencies.
As for other precious metals, silver for September delivery was up 14 cents, or 0.83 percent to close at 17.071 dollars per ounce. Platinum for October delivery was down 0.1 dollar, or 0.01 percent, to settle at 863.70 dollars per ounce.