Gold rose more than 2 percent on Tuesday as the dollar weakened and stock markets slid, with concerns over tension between Russia and the West also helping push the metal through key chart levels, triggering fresh buying.
Spot gold rose to $1,204 an ounce, up 1.8 percent on the day. U.S. gold futures for February delivery settled $18.50 higher at $1,200.40 an ounce.
Gold prices are off 0.5 percent for the year. The most active contract on Dec. 31, 2013 settled at $1,206.60 an ounce.
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A wave of risk aversion swept through global markets on Tuesday, with end-of-year caution and worries about Greece's future in the euro zone pushing European shares down 0.7 percent. A drop in oil prices also hurt sentiment.
Among currencies, the dollar index fell 0.3 percent, pressured by strength in the yen as investors sought the traditional safety of the Japanese currency amid end-of-year nerves over economic risks ahead.
"Gold... has been on something of a roller coaster for the past few days," Ed Meir, an analyst at INTL FCStone, said. "We suspect that the dollar weakening against the yen may have triggered some buying and also equity weakness, particularly in many emerging markets."