Gold prices climbed over 1% to settle at their highest since early February on Wednesday as a fresh crisis in the banking sector turned investors away from seemingly riskier assets and drove them to the safety of bullion.
Gold gained 1.07% to settle at $1,931.3.
"It's a total safe-haven trade. There's a lot of concern about Credit Suisse and now European banks are really coming under quite a bit of pressure. So it's a complete flight to safety," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Europe's bank stocks came under pressure again, with Credit Suisse shares sliding after its largest investor said it could not provide the Swiss bank with more financial assistance.
"People are going to the U.S. Treasuries, gold, silver, and the dollar. They're exiting riskier assets like U.S. equities and economically sensitive metals like copper, platinum and palladium," Streible said.
Gold rose despite a sharp jump in the U.S. dollar which would usually weigh on demand for dollar-priced bullion.
Silver dipped 0.72% to settle at $21.88 per ounce, platinum was last 2.5% lower at $958.36 and palladium lost 4.8% to $1,444.8
Overall focus was still on the Federal Reserve's next move on interest rates as it assesses data showing elevated inflation in February against the backdrop of the collapse of two regional banks.
Markets put a 42.9% chance on the Fed raising its benchmark rate by 25 basis points at its March 21-22 policy meeting, and a 57.1% probability of rates being held at current levels.
Gold is traditionally considered a hedge against inflation, but higher rates increase the opportunity cost of holding the non-yielding asset.
Volatility is expected over the coming days ahead of the Fed meeting, said Craig Erlam, senior market analyst at OANDA.