Gold prices climbed to a fresh five-month high as a weak US dollar, worries about the global economy and uncertainty over whether the European Central Bank will announce stimulus measures boosted the metal's safe-haven status.

Spot gold rose 0.4% to $1,299.40 an ounce by 0804 GMT, its highest since August 2014.

The greenback lost some ground as the Japanese yen strengthened, after the Bank of Japan (BOJ) left its monetary policy unchanged.

Concerns surrounding the health of the global economy have boosted the metal's demand.

Prices were also buoyed by the fact that the markets have been edgy about 22 January's ECB meeting, at which the bank could roll out a quantitative easing (QE) programme.

HSBC analyst James Steel told Reuters: "Bullion's recent divergence from moving in tandem with the euro to the opposite of the euro is attributed to its appeal as a perceived safe-haven asset.

"While we do not discount further safe-haven-inspired gains in gold, the yellow metal may be in need of a price consolidation, given its 9% gain in less than three weeks of trading so far this year," Steel said, adding that softer physical buying might also keep a check on rallies.

Nordea Markets said in a note: "Heated QE discussions continue in the Euro area. Former ECB Governing Council member [Athanasios] Orphanides argued that the idea of leaving national central banks responsible for the risks of their own sovereign bonds in connection with ECB QE would violate the EU treaty.

"He has a good point, as it is hard to see how such an approach would be consistent with the principles of single monetary policy. Still, ECB QE is also about finding compromises between many differing views, meaning that the eventual programme is unlikely to be the most efficient one."

Tuesday trade

Safe-haven and technical buying was behind the precious metal's 1% jump on 20 January.

Improving investor confidence was reflected in the holdings of the SPDR Gold Trust. The world's largest gold-backed exchange-traded fund (ETF) saw holdings jump 1.55% to 742.24 tonnes on 20 January.

Earlier on Tuesday, an International Monetary Fund (IMF) forecast painted a gloomy picture for global growth this year. The agency projected global growth at 3.5% for 2015 and called on governments and central banks to pursue accommodative monetary policies and reforms.