Investors also kept an eye on Japan's progress in averting a full-blown nuclear disaster, caused by a devastating earthquake and tsunami on March 11 that prompted a surge in physical gold premiums to three-year highs as buyers in less affected parts of the nation stretched supply.

Spot gold edged up 0.4 percent at $1,430.45 an ounce by 0306 GMT, after reaching $1,434.70 in the previous session, just $10 off the record high hit on March 7.

US gold gained 0.3 percent at $1,430.80.

"The tensions in Libya and the overall Middle East and North Africa region is supportive of gold prices. There is little doubt that gold would test a new high in the near future," said Li Ning, an analyst at Shanghai CIFCO Futures.

"In the medium to long term, concerns about inflation will continue to buoy gold."

Li added that inflationary concerns have spread from emerging economies including China, to developed economies including euro zone nations.

A prolong period of high oil prices could help fan up inflation, and in turn boost demand for gold, seen as a hedge against inflation.

Brent crude futures were supported near $115 on Tuesday by supply concerns triggered by the spreading unrest in the Middle East, while uncertainty about demand from the world's No. 3 consumer Japan capped gains.

Japan appears to be making progress containing the nuclear crisis as it restored power cables to all six reactors and started a pump at one of them to cool overheating nuclear fuel rods. But rising smoke and haze from two of the most threatening reactors suggested the battle was far from won.

Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , fell a hefty 10.616 tonnes, its biggest one-time fall since late January, suggesting some investors might have lost interest in bullion for the time being.

The sentiment was echoed by a technical analysis, which indicated that gold may retrace to $1,416, as the current rally is exhausted, according to Reuters market analyst Wang Tao.

Gold futures on the Tokyo Commodity Exchange also edged up 0.4 percent at 3,734 yen per gram, or $1,430.12 an ounce.

"Gold in yen jumped up this morning, and we've seen some selling back," said a trader at a Tokyo-based bullion house.

Premium for gold bars in Tokyo were steady at $1.50 to $2 over London spot prices, he added.

Spot silver tracked gold's strength and hit an intra-day high at $36.33 an ounce, just a hair off a 31-year high of $36.70 hit in early March.