Gold held firm just below a four-month high on Tuesday, underpinned by safe-haven bids on market volatility stoked by uncertainty over Europe's economy and global growth worries. Traders were awaiting the European Central Bank policy meeting this Thursday, which could see the unveiling of a bond-buying stimulus package. The Sunday election in Greece, where the anti-bailout party Syriza maintains a lead in the polls, also added to nervousness in the market.
Spot gold was steady at $1,277.10 an ounce at 0735 GMT, after easing 0.2 percent on Monday. The metal had jumped to a September peak of $1,281.50 on Friday, after a broad market rout prompted by Switzerland's unexpected move abandoned a cap on the franc. "The expectation is gold will move higher towards $1,300, however, we are likely to see a profit-taking-driven pull back with support for such a move lower sitting around $1,250," said MKS Group trader Sam Laughlin.