Block of gold
Block of gold Reuters

Gold prices rose Tuesday on global concern over the future of the euro zone, the continent's currency and the fragile state of worldwide economic growth.

President Barack Obama expressed concern to Spanish journalists about European leaders not acting more resolutely. Also, Treasury Secretary Timothy Geithner plans on taking the unprecedented step of attending a meeting of EU finance ministers in Poland on Friday -- his second trip to Europe in a week.

The contagion that started in Greece 20 months or so ago has now spread to Europe's third-largest economy, Italy, which auctioned off five-year notes on Tuesday. However, the only way it could find buyers was by offering the highest interest rate in the security's history, a fresh indication that investors see Rome as a less and less reliable borrower.

Industry leaders are now openly speaking of the possibility that the euro itself may not survive the growing soverign debt crises.

I think there is a possibility, if the wrong steps are taken, that the system goes off the rails, Sergio Marchionne, the CEO of Italian carmaker Fiat, told Reuters.

Besides threats to the euro, investors took note of the increasingly precarious position of European banks, which hold the debt of such weak economies as Greece, Portugal, Ireland, Spain and Italy. Bank shares dropped to a two-year low in morning trading, but from that bottom clawed their way up to lead major European indexes to a positive close.

With the euro and the euro zone under severe threat, safe-haven investors moved into gold.

The yellow metal also may have gotten a lift from earnings of U.S. corporations.

Best Buy said that profit declined in the second-quarter to $177 million from $254 million the same time last year. Revenue increased slightly year over year to $11.35 billion; however, both profit and revenue came in below expectations. The company also brought down its full-year outlook. Morningstar analysts noted a few positives from Best Buy's earnings, but shares had slumped by 7.6 percent in early afternoon trading.

Cracker Barrel Old Country Store's fourth-quarter profit dropped to $17.5 million, a 36 percent decrease from the same time last year. The restaurant's sales came in flat, while both profit and revenue did not meet expectations. Cracker Barrel still raised its dividend to 25 cents per share and agreed to a $65 million stock buyback.

Despite weak earnings, U.S. stock posted modest gains in the afternoon but volatility was high. U.S. Treasuries rose.

It's a difficult environment for a long-term investor, Mr. Detrick said. Any news can take you significantly higher or lower. There's just so much volatility.

Gold on the New York futures market rose $16.80 to $1,830.10. Gold for immediate delivery was up $33.56 to $1,839.67.

Silver on the New York futures market climbed 98 cents to $41.19 . Silver for immediate delivery gained $1.06 to $41.16.