Spot gold had slipped 0.2 per cent to $1,230.70 an ounce by 0031 GMT, but retained most of its 2-per cent gain from the last two sessions. The metal on Monday climbed to its highest since December 10 at $1,235.90.
US gold futures were also holding near a one-month peak of $1,236.
Most stock markets around the world fell on Monday as oil prices showed no sign of breaking their prolonged downward spiral.
Oil fell 5 per cent to its lowest in nearly six years on Monday, extending the second-deepest rout on record, after Goldman Sachs warned that prices would fall further and Gulf oil producers gave no indication of cutting output.
Gold, typically seen as an alternative investment to riskier assets such as stocks, rose as investors channelled money into the asset.
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 recently been hit by persistent weakness in oil prices and concerns have risen over the economic impact of lower oil, flight-to-safety demand has bolstered the metal.
Bullion also drew support from the Asian physical markets, with buyers in China stocking up for the Lunar New Year holiday in February.
Turkish gold imports fell to 11.8 tonnes in December from 31.6 tonnes a year ago, data from Bourse Istanbul showed on Monday.
The dollar got off on the backfoot against the yen on Tuesday, as Treasury yields fell on increased demand for safe-haven assets amid plunging oil prices and weaker stock markets.
Copyright: Thomson Reuters 2015