Gold was treading water on Wednesday, hovering near a four-month low hit in the previous session, as investors await U.S. economic data, amid increasing optimism about growth and sluggish bullion demand in Asia.
Markets are eyeing U.S. private hiring data later on Wednesday and nonfarm payrolls on Friday to gauge economic strength. Gold is often seen as an investment-hedge at times of economic uncertainty.
Spot gold was flat at $1,245.35 an ounce by 0204 GMT. The metal hit a four-month low of $1,240.61 on Tuesday, before closing flat and snapping a five-day losing streak.
Asian shares were steady on Wednesday and the dollar benefited from rising U.S. Treasury yields.
"I think prices will stabilize here for a short while around $1,245 before making another big jump either way," said a trader in Hong Kong. "People are mostly waiting for Friday's payrolls data before taking any big positions."
"If the jobs report is strong, there won't be much buying interest in gold since other economic data has also been good and the stock markets are still near record highs."
Employers probably added 218,000 jobs to their payrolls last month, according to a Reuters survey of economists. While that would be step down from April's robust 288,000 job gain, it would still be above the average for the preceding six months.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 1.8 tonnes to 787.08 tonnes on Tuesday.
The inflow could be supportive in the near term, but the fund's overall holdings are still near 5-year lows, indicating bearish sentiment.
Asian physical demand, which usually tends to provide a floor to prices during sharp losses, has been weak as many expect gold to go lower. Asia is home to major gold consumers, China and India.
Traders say demand could come back up if prices at least stabilize around current levels.
Among other precious metals, platinum steadied after a three-day fall as union workers in top producer South Africa consider a government proposal to resolve a 5-month platinum strike.