The most active gold contract for February delivery rose 15.20 dollars, or 1.03 percent, to settle at 1,484.40 dollars per ounce.
U.S. stocks traded sharply lower as investors monitored the latest trade disputes between the United States and its major trading partners.
The Dow Jones Industrial Average on Tuesday lost more than 300 points before the settlement of gold. The S&P 500 and Nasdaq Composite Index followed Dow's fall.
U.S. President Donald Trump has announced that he will "restore" tariffs on steel and aluminum imported from Brazil and Argentina, triggering wide concern domestically and abroad.
Washington's threat to hit French products with tariffs over a taxation dispute concerning large U.S. tech companies also fueled turmoil in the stock market.
When equities fall sharply, investors usually flock to safe-haven assets, such as gold.
Gold found additional support from a weakened U.S. dollar. The U.S. dollar index, a gauge of the greenback against a basket of other major currencies, fell significantly on Tuesday to around 97.70.
If the dollar softens, the dollar-priced gold usually rises as it becomes less expensive and more attractive to investors holding other currencies.
As for other precious metals, silver for March delivery was up 28.2 cents, or 1.66 percent, to close at 17.248 dollars per ounce. Platinum for January delivery rose 11.90 dollars, or 1.32 percent, to settle at 911.60 dollars per ounce.
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