Gold prices traded higher on Tuesday. Spot gold rose to $1,293.80 a troy ounce in morning European trade. Gold price increased due to concerns over global economy. The International Monetary Fund (IMF) cut its forecasts for global growth. It expects the world economy to expand 3.5% in 2015, down from an earlier projected 3.8% rise, and 3.7% in 2016, down from an earlier projected 4.0% gain.

Gold also benefited from the Swiss National Bank's decision to discontinue the 1.20 per euro exchange rate floor.

Gold is expected to trade higher ahead of the European Central Bank (ECB) policy meeting on Thursday and parliament elections in Greece on Sunday.

Analysts expect that the ECB President Mario Draghi will announce on Thursday a 550 billion-euro bond-buying programme.

There is also speculation that Greece could leave the Eurozone. If a left-wing government wins Greek parliament elections, it may cancel austerity measures and may renegotiate Greece's debt.