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Gold inched up on Thursday on the back of a weaker dollar, as investors assess whether the latest set of U.S. economic data will boost the prospect of an early interest rate hike by the Federal Reserve.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1 percent on Thursday. A weaker dollar makes gold less expensive for buyers in other currencies.

Investors are looking out for trading cues from the U.S. May ADP private employment report due later in the day for potential relief, with the report often seen providing clues to the non-farm payrolls data, scheduled for release on Friday.

Spot gold is biased to revisit its May 30 low of $1,199.60 per ounce, as it has failed to break a resistance at $1,219, Reuters technical analyst Wang Tao said.

"We do not think $1,200 is a bottom. Before Fed's July conference, gold will touch a new bottom of perhaps $1,130-1,140 in the following one and a half months," said Jiang Shu, chief analyst at Shandong Gold Group, the parent of Shandong Gold Mining Co Ltd.

Global markets entered June on a circumspect footing with the OPEC and ECB meetings Thursday setting the stage for a month that will also see the U.K. vote on whether to remain in the European Union and a possible interest-rate increase by the Federal Reserve. Wednesday data showed the U.S. manufacturing sector grew more than forecast last month and American employment figures on Friday will help shape expectations for the timing of the next rate hike. Fed Funds futures indicate a 53 percent chance of a move by July.

“Caution looks set to remain supreme ahead of this week’s payrolls report,” Cameron Bagrie, chief economist in Wellington at ANZ Bank New Zealand Ltd., said in a client note. “Modest economic signals out of the U.S. set the tone and maintain the market erring toward rates moving up, but not really excitable enough to buoy the dollar.”

The greenback nursed declines, with the Bloomberg Dollar Spot Index little changed following last session’s 0.4 percent drop. Investors are paying close attention to U.S. data after Fed officials indicated a potential interest-rate hike as soon as this summer was contingent on continued improvement in the economy. Friday’s payrolls data is projected to show the number of workers increased by 160,000 in May, matching the advance in April.

Reference: Bloomberg, Reuters