Gold futures hit their highest level since Dec. 3, as concerns about European sovereign debt returned to the market just one day after European officials announced a support plan totaling nearly $1 billion that they had hoped would calm these fears.

Gold for June delivery recently was up $20.70, or 1.72%, to $1,221.50 an ounce on the Comex division of the New York Mercantile Exchange. The contract peaked at $1,222.90, its strongest level since a Comex most-active record of $1,227.50 an ounce was hit on Dec. 3.

The "initial euphoria" that enabled equities and the euro to rise Monday, following a €750 billion ($959.1 billion) European support plan for financially strapped nations, "quickly dissipated," said a research note from bullion dealer GoldCore. Now, "there is a growing realization that the unprecedented measures may not be enough to contain the euro-zone debt crisis," it said.

This has investors scurrying back into gold, and this may continue until there is more certainty that the European situation can be resolved, said Mike Daly, gold specialist at PFGBest in Chicago

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Gold has again become a safe haven for investors. Above, gold bars are displayed at bullion house in Mumbai.

"[Investors] are saying that as long as this climate is here, they're going to put their money into tangible assets. And obviously, the No. 1 tangible asset is gold," he said.

There are a range of concerns about Europe, including the potential for more credit downgrades from ratings agencies and whether countries will eventually be able to pay back their loans from the support program.

"People are realizing the instability in the region is far from over, no matter how much money they are putting up," Mr. Daly said. "These countries still have to stand on their own two feet and pay back these loans. The question is, 'how are they going to do it?'"

Over the past months, amid ultra-low interest rates, gold had come to be traded as a risk play, or an asset bought when risk tolerance is high in hopes of higher returns. But as tensions about the euro-zone sovereign-debt crisis intensified last week, investors returned to buying gold in its more traditional role as a haven seen holding its value amid economic and political uncertainty.

Holdings in the largest gold exchange-traded fund set a record this week as well. SPDR Gold Shares now stand at a record 1,192.15 metric tons, a rise of 51 tons from a month ago and 33 tons from a week ago.