Gold futures on the COMEX division of the New York Mercantile Exchange traded extended rally on Tuesday, as heavy losses in the equities markets could have increased gold's safe haven appeal.

The most active gold contract for June delivery rose 16.8 U.S. dollars, or 1 percent, to settle at 1,660.7 dollars per ounce.

Market analysts said that outside market atmosphere on Tuesday was significantly negative, as equities continued Monday's sharp decline. The Dow Jones Industrial Average was down 1.5 percent in the afternoon trading driven in part by renewed concerns over the euro zone debt crisis, as Spanish and Italian 10-year bond yields soared after a weak government bond auction.

Crude oil and copper prices were also down sharply, further adding to outside market pressure.

Traders said that gold was able to take some strength from the outside market negativity, as the precious metal is traditionally seen as a safe haven in terms of economic crisis.

Although gold had seen some losses in morning trading, with a low of 1,633 U.S. dollars an ounce, trading picked up after the bearish U.S. stock market became increasingly clear.

Silver also took some strength from gold's rise on Tuesday. Silver for May delivery rose 15.5 cents, or 0.49 percent, to settle at 31.679 dollars per ounce. July platinum shed 24.5 dollars, or 1.5 percent, to settle at 1,593.7 dollars per ounce.