Gold futures on the COMEX Division of the New York Mercantile Exchange kicked off the new year with a strong rally on Tuesday, as concerns over Iran tension triggered safe-haven demands. Besides, a weaker dollar added to the bullish stone.

The most active gold contract for Feb. delivery hiked 33.7 U.S. dollars, or 2.2 percent, to 1,600.5 dollars per ounce, the highest settlement since Dec. 23.

Market analysts said that a lot of buying came from safe-haven demands amid geopolitical concerns surrounding Iran. Iran recently threatened to block the Strait of Hormuz, one of the world's most critical oil routes, in face of Western sanctions on its energy sector.

Meanwhile, a weaker U.S. dollar also helped enhance the appeal of gold as an alternative investment. The dollar index, which measures the value of dollar against six other currencies, on Tuesday, traded around 79.64, down almost 0.8 percent from the prior trading day.

Besides, a trader noted that Tuesday's rally is a recovery from the end of the year. Gold ended lower for six straight sessions in late Dec., but ended higher in the last trading day of 2011. Gold concluded 2011 with a 10 percent for the year.

Silver for March delivery gained 1.657 U.S. dollars, or 5.9 percent, to 29.572 dollars per ounce. Platinum for April delivery dropped 27.6 dollars, or 1.68 percent, to 1,432.5 dollars per ounce.