Gold settled modestly lower on Wednesday as investors remained cautious ahead of a European Central Bank meeting and a payrolls report.
U.S. companies hired 179,000 workers in May, marking the lowest monthly increase since January and missing market expectations. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 210,000 jobs in May.
"There is no point looking at this number in isolation ... let's take the week as a whole... there are more important things like the ECB tomorrow and the nonfarm payrolls,'' Societe Generale analyst Robin Bhar said.
"So yes gold is up on this but for how long? I would still want to sell the rally,'' he added. "I don't think it changes the mood of the market, and basically we are going lower.''
A Reuters survey of economists forecast that employers probably added 218,000 jobs to their payrolls last month. 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.
for August delivery closed 20 cents lower at $1,244.30 an ounce.
Spot gold, meanwhile, was flat at $1,244 an ounce. The metal hit a four-month low of $1,240.61 on Tuesday, before closing flat, snapping a five-day losing streak.
The dollar cut some gains to trade 0.1 percent higher against a basket of currencies, as U.S. borrowing costs retreated slightly.
In other markets, global shares fell before Thursday's European Central Bank meeting. The central bank is widely expected to cut interest rates, including lowering the rate banks are charged for depositing funds with the central bank to below zero.
As a gauge of investor interest, holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.8 tons to 787.08 tons on Tuesday.
The inflow could be supportive in the near term, but the fund's overall holdings are still near five-year lows, indicating bearish sentiment, analysts said.