SAN FRANCISCO (MarketWatch) — Gold futures rose 1.5% Tuesday after military hostilities on the Korean peninsula gave investors more reason to seek safety in the metal.

Gains in gold for December delivery GCZ10 accelerated during the session, and the metal settled up $19.80 to $1,377.60 an ounce on the Comex division of the New York Mercantile Exchange.

Gold futures rose modestly Monday, helped by worries about European sovereign debt as investors wanted to hear more details about a bailout package for Ireland.

Gold bulls and bears debate outlook

North Korea and South Korea, however, have become the latest focus of worry for investors.

The two countries exchanged artillery fire at a South Korean island near their western border, according to reports. South Korea’s military had gone to its highest state of alert.Read more on Korean tensions.

A rising dollar kept gold prices from ballooning even higher. The dollar index DXY, -0.06% , which gauges the U.S. unit against a basket of six other currencies, gained 1.2% to 79.615.

The euro declined sharply, following comments from German Chancellor Angela Merkel about the European currency’s fragile state ahead of the Irish rescue. The single currency recovered somewhat later on. See more on trading in the dollar and other global currencies.

Geo-political selloff for stocks

Silver, meanwhile, wobbled after opening higher, at times dipping in the red.

The December contract SIZ10, however, held on to gains to close up 11 cents, or 0.4%, to $27.57 an ounce.

Gold and silver are “profiting from the renewed rise in risk aversion, which has intensified again by an attack on a South Korean island by North Korea overnight,” analysts at Commerzbank said in a note to clients.

The silver contract had gained 1% on Monday. “Silver is still reaping benefit from robust [exchange-traded fund] demand,” the Commerzbank analysts said.

The iShares Silver Trust SLV, +2.26% had inflows of 27 metric tons Monday. Since the start of the month, 700 metric tons of silver found their way to the ETF.

By contrast, gold holdings of the SPDR Gold Trust GLD, +0.86% , the largest gold-backed ETF, have fallen by 8 metric tons this month, and 4.2 metric tons of gold left the ETF on Monday.

Copper tracked equities and other commodities such as oil to end lower on Tuesday. December copper HGZ10 declined 5 cents, or 1.4%, to $3.71 a pound. That was copper’s second consecutive closing in the red, and it comes after the metal rose above $4 per pound earlier this month.

Platinum and palladium followed gold. Platinum for January delivery PLZ10 added $2.20, or 0.1%, to $1,657.70 an ounce.

Palladium for December delivery PAZ10 rose $6.40, or 0.9%, to $691.10 an ounce.