Gold prices surged more than 5.5 percent on Tuesday, recording their biggest single-day gain since November 2008.
Silver also posted strong gains. At the time of writing, silver was up 7.1 percent at $86 per ounce, research shows.
Spot gold rose 5.8 percent to $4,935.56 per ounce by 13:20 PKT, after falling to a session low of $4,403.24 on Monday. Bullion had peaked at $5,594.82 just two sessions earlier.
Meanwhile, US gold futures for April delivery climbed 6.6 percent to $4,958.50 per ounce.
The rebound follows a volatile period in which gold jumped 13 percent in January, its strongest monthly performance since November 2009. The market expects the bullish trend to persist, with prices likely to test new record highs later this year.
Silver jumped 10 percent to as high as $87.5 per ounce on Tuesday, recovering after a historic 27 percent selloff on Friday, followed by an additional 6 percent decline on Monday. The metal hit an all-time high of $121.64 last week.
The recent correction in precious metals was triggered by a strengthening US dollar. Additional pressure came from higher margin requirements imposed by sellers on precious metal futures.
Among other precious metals, spot platinum rose 6 percent to $2,242.55 per ounce, after reaching a record high of $2,918.80 on January 26. Palladium gained 5.4 percent to $1,815.
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