US gold futures settled up $8.3, or 0.68 percent, at $1,230.3.
"People are running towards safety and flocking to gold on concerns about Italy's debt, United States' relationship with China and Saudi Arabia," said Michael Matousek, head trader at US Global Investors.
World markets were in the red again on Monday as a bounce in oil prices and rising tensions between Western powers and Saudi Arabia added to concerns that battered global stocks last week.
On the technical front, gold poked above the 100-day moving average at around $1,227 and a close above it could provide additional support, analysts said.
"A lot of people were short gold. We are seeing that interest unravel because of some concerns about global equity markets on the back of a hawkish US Federal Reserve," said David Song, an analyst at DailyFX. Data showed speculators extended their net COMEX gold short positions in the week to Oct. 9.
Holdings of SPDR Gold, the largest gold-backed ETF, rose nearly 2 percent last week. That was the biggest weekly inflow since January, following declines of more than 4 million ounces since hitting a peak in late April.
Gold, usually seen as a safe store of value during political and economic uncertainty, remains down about 10 percent from its April peak after investors preferred the dollar as the US-China trade war unfolded against a background of higher US interest rates.
In other precious metals, platinum rose 0.2 percent to $838.25 per ounce after touching its highest level since July 10 at $850.10.
Palladium climbed 1.7 percent to $1,083.90 and silver gained about 1 percent to $14.69.