Gold edged higher on Wednesday after falling more than 1 percent in the previous session but gains were capped as Greece's plan to end a standoff with creditors sharpened appetite for risky assets.

SINGAPORE, Feb 4 (Reuters) - Gold edged higher on Wednesday after falling more than 1 percent in the previous session but gains were capped as Greece's plan to end a standoff with creditors sharpened appetite for risky assets.

Spot gold was up 0.3 percent at $1,263.95 an ounce by 0716 GMT, after falling 1.2 percent on Tuesday, which marked gold's fourth drop in five sessions.

"Appetite for risk now appears higher and that is spurring some rotation of funds away from the safe havens in the yen and gold to riskier assets such as equities and the euro," Phillip Futures investment analyst Howie Lee said in a note.

"Barring any downside black swan events, it is now increasingly unlikely that we could see gold racing for $1,300 again in the near future."

Spot gold has largely fallen since hitting a five-month peak of $1,306.20 on Jan. 22, paring the metal's year-to-date gain to less than 7 percent.

U.S. gold for April delivery rose 0.3 percent to $1,264.50 an ounce.

Greece's new government dropped calls for a write-off of its foreign debt and proposed ending a standoff with its official creditors by swapping the debt for growth-linked bonds.

That helped calm fears over the euro zone, lifting Asian stocks to their highest in three months.

A sharp 19 percent rebound in oil prices in the four sessions to Tuesday also burnished risk appetite even as crude pared some of those gains on Wednesday.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 24.59 million ounces on Tuesday from 24.65 million ounces the day before, which was the highest level since October.