Gold rose above $1,230 an ounce and neared a one-year high on Wednesday, acting as counter against risk alongside top-rated government bonds as oil's earlier weakness rippled into global equity markets.
Spot gold rose as much as 2.1 percent to a session high of $1,252.91 an ounce, just shy of a one-year high of $1,260.60 reached on Feb. 11.
The market's rediscovered role as a shelter for risk-averse investors seemed to be gaining traction, traders and analysts said, even as the dollar gained ground against a basket of major currency rivals. The dollar fell later in the day.
"Gold is rising on the back of weak risk appetite, but what stands out today is that the market is rising even though the dollar is higher as well," Jens Pedersen, senior analyst at Danske Bank, said when the greenback was firm.