Gold prices rose just over 2 percent on Thursday afternoon, reversing earlier losses and lifting silver, as U.S. equities resumed their downward spiral, renewing bullion's safe-haven appeal that has spurred the market's biggest rally in years.
On Wall Street, equities snapped a three-day rally, after a slump in shares of Wal-Mart Stores weighed on retail stocks and oil prices retreated.
"The equities pulled back. Gold popped," said Bob Haberkorn, senior market strategist at RJO Futures in Chicago.
"While equities are starting to come back and oil's shown a little bit of life, gold is strengthening as the day goes on. The sentiment in gold right now is overwhelmingly bullish."
Spot gold was up 2.2 percent at $1,235.30 an ounce after steadily rising $35 off the intraday lows. The recovery put it closer to the one-year highs around $1,260 hit a week ago.