The most active gold contract for February delivery rose 27.7 U.S. dollars, or 1.54 percent, to close at 1,825.4 dollars per ounce.
The Bank of Japan announced on Tuesday that it would loosen its policy of tightly controlling yields on government bonds, sending the Japanese yen surging against the U.S. dollar.
Investors are also worried about the potential for a U.S. economic recession.
U.S. Commerce Department reported Tuesday that the construction on new U.S. homes fell a seasonally adjusted 0.5 percent in November to 1.43 million. However, building permits for new homes fell 11.2 percent to 1.34 million in November.
Investors are also waiting for key U.S. inflation data due out on Friday.
Silver for March delivery rose 1.072 dollars, or 4.62 percent, to close at 24.271 dollars per ounce. Platinum for January delivery rose 25.3 dollars, or 2.56 percent, to close at 1,013 dollars per ounce.
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