Gold and silver prices surged on Monday, as their safe-haven appeal drew in investors spooked by the collapse of Silicon Valley Bank, with the crisis also sparking hopes the U.S. Federal Reserve would have to slam the brakes on its aggressive monetary policy.

Global share markets tumbled, while the U.S. dollar and Treasury yields extended their declines despite efforts by regulators to control the Silicon Valley Bank and Signature Bank turmoil.

"Gold looks very much like it is fulfilling its mandate as a safe haven," with support from short covering of long exposures, said Bart Melek, head of commodity markets strategy at TD Securities.

Spot gold jumped 2.2% to $1,909.19 per ounce by 11:13 a.m. EDT (1513 GMT), the highest since early February. U.S. gold futures gained 2.5% to $1,914.40.

Other precious metals followed suit, with silver advancing 6.2% to $21.78 per ounce, platinum jumping 3.9% to $996.26, and palladium soaring 6.6% to $1,469.47.

"A lot of investors are looking to the precious metal space as a safe haven against this volatility and this risk... amid a much lower interest rate environment, and the U.S. dollar that's dropping," which is lifting their prices, Melek said.

Traders no longer expect a rate hike of 50 basis points by the Federal Reserve next week and the current projection is for a 25-basis-point move, with some even expecting no hike at all, making gold more attractive as it doesn't yield any interest.

"The future of gold prices largely depends on whether the Fed's measures prove effective. If the Silicon Valley Bank's (SVB) bankruptcy is deemed an isolated incident, gold may lose some of its recent gains," said Alexander Zumpfe, a precious metals dealer at Heraeus.

"However, if the crisis leads to a sustained reversal in the Fed's policy, gold may remain in demand."