Spot gold had ticked up 0.1 per cent to $1,231.80 an ounce by 0045 GMT.
Gold closed Tuesday down 0.2 per cent after marking a 12-week high of $1,243.60 earlier in the session as the dollar returned to near its session-highs and as crude oil prices pared steep losses.
Oil tumbled 5 per cent to near six-year lows before recovering ground on Tuesday, and Brent briefly traded at par to U.S. crude for the first time in three months as some traders moved to take advantage of ample storage space in the United States.
Weaker oil prices tend to hurt gold as they reduce the need for the precious metal as a hedge against oil-led inflation. But as equity markets have been hit by the slump in oil prices and concerns have risen over its economic impact, flight-to-safety demand has bolstered the metal.
Equities were also hurt on Tuesday after the World Bank lowered its global growth forecast for 2015 and next year due to disappointing economic prospects in the euro zone, Japan and some major emerging economies.
The global development lender predicted the global economy would grow 3 percent this year, below a forecast of 3.4 per cent made in June, according to its twice-yearly Global Economic Prospects report.
Other safe-haven assets such as the yen were also well-bid. The dollar neared one-month lows against the Japanese yen early on Wednesday as U.S. yields continued to shrink.
Bullion traders were closely watching moves in the currency markets as a stronger dollar would dull the metal's appeal as a hedge.
The euro was pinned near nine-year lows on Wednesday as investors wagered the European Central Bank was just a week away from launching a new stimulus campaign, while concerns about the global economy kept Asian equities subdued.