Gold rose above $1,200 an ounce, boosted by firmer oil prices on Wednesday that prompted investors to shuffle positions in a volatile market.
The metal had fallen to a near-three-week low on Monday after Switzerland voted against a proposal to boost its gold reserves. It then managed a recovery to its highest in a month, as oil prices recovered from a five-year low.
The SPDR Gold Trust, the world's top gold-backed exchange-traded fund, saw inflows of 2.4 metric tons on Tuesday.
``There is some position reshuffling ... due to the level of volatility we have seen in the past few sessions,'' Julius Baer analyst Carsten Menke said.
``I wouldn't read too much into it, though, because the key drivers in the medium to longer term are the recovering U.S. economy and expected rate hikes next year, which should dent investor demand for gold.''
was up 0.9 percent at $1,210 an ounce, having fallen 1 percent in the previous session on a bouncing dollar and diving crude prices.
Read MoreGold shorts send metal to key $1,200
Gold gained about 10 percent in the first half of the year, helped by geopolitical tensions and disappointing U.S. economic data, before surrendering to a rallying dollar and expectations of interest rate rises.
Investors would be encouraged to withdraw more money from non-interest-bearing assets such as gold if rates rise sooner than expected.
Wednesday's gains were kept in check by a firmer dollar, which rose to its highest in more than 5-1/2 years against a basket of currencies, while U.S. yields and European shares also increased.
``We expect the gold price to remain under pressure initially in the first half of next year on the back of growing speculation about increasingly imminent interest rate hikes in the United States,'' Commerzbank said in a note.
It sees gold falling to $1,125 on average in the second quarter of 2015 but expects it to climb to $1,250 by the end of the year as the pressure abates.