Gold prices jumped more than 1 percent Monday on a plunging dollar and strong physical buying from India and China.

The dollar fell hard early Monday, down 1.1 percent on the ICE US Dollar Index, as French and German leaders vowed Sunday to cooperate in protecting the continent's banks from a Greek default. Despite a lack of details on just how such cooperation would be accomplished the euro rose and the dollar fell.

While a detailed plan was lacking, we view any progress on bank recapitalization as a positive for gold, Swiss bank UBS said in a client note. Typically liquidity concerns and funding issues are not gold's friends.

Meanwhile, Chinese buyers returned from their Golden Week holidays and resumed buying, and purchases of physical gold rose as Indians approached their Diwali festival, one of the most significant gold-buying periods in the nation's calendar.

Other precious metals jumped, led by palladium, which soared 4.6 percent, followed by silver, up 3.8 percent, and then platinum, gaining more than 2 percent.

Gold for December delivery jumped $28.50 to $1,635.80, while gold for immediate delivery was up $17.84 to 1,659.68.

Silver for December delivery rose $1.09 to $32.09, while silver for immediate delivery climbed 78 cents to $32.10.