Gold pellets
Gold pellets Lisi Niesner

Gold and silver prices rose more than two percent Tuesday on rising fear that European leaders will be unable to produce a viable rescue plan for the continent's banks, or its staggering southern periphery.

European leaders are set to unveil a comprehensive plan to stop the two-year sovereign debt crisis and protect the continent's banks. The closer the meeting comes the greater the anxiety investors appear to be experiencing.

Partly that is reflected in major stock indexes. The Dow Jones Industrial Average was down nearly one percent, the Nasdaq Composite fell 0.99 percent and the S&P 500 lost 1.07 percent. The declines mirrored what European stock indexes were doing.

Meanwhile, gold and silver surged, even though the dollar, which has been competing with precious metals as a safe-haven investment, was rising against a basket of major currencies.

In midday trading, gold for December delivery on the Comex, the most actively traded contract, climbed increased $32.60 to $1,689 -- a 2.25 percent jump -- while spot gold jumped $34.38 to $1,687.48.

Silver for December delivery added 49 cents to $32.14, and spot silver rose 64 cents to $32.33.

On the Comex, platinum added $15.30 to $1,557.30 and palladium was up $1.85 to $640.35.