Spot gold was down 0.4 percent at $1,654.49 an ounce at 0915 GMT, while U.S. gold futures for June delivery were down $6.70 an ounce at $1,655.70.
The precious metal traded in its tightest monthly spread since last June in April and remains firmly within the $1,620-1,670 range, awaiting fresh impetus from the wider financial markets and economic indicators.
Jobs data at 1215 GMT will be closely watched as a precursor to a key non-farm payrolls report on Friday. A weak report would lift expectations for more monetary stimulus.
"With economic data throwing mixed signals, it is most likely that gold will continue to wobble in a narrow range, at least until there is clarity on the jobs front," Richcomm Global Services analyst Pradeep Unni said.
"In the near term, we need to break and hold above 1676 for a quick spike to 1700," he added. "Pent-up buying would resume on any dips below 1630. Worse than expected data on Friday will add acceleration to the uptrend."
The dollar was up 0.5 percent against the euro on Wednesday after a weak reading of euro zone manufacturing activity contrasted with a stronger reading from the United States on Tuesday, when the Institute of Supply Management report showed the strongest rate of U.S. factory growth in 10 months.
The U.S. data lifted appetite for risk across the board, leading to an early rise in European stock markets and a fall in German bund futures.
A spate of more positive readings on the U.S. economy has cut speculation the United States will extend quantitative easing to stimulate growth, a move which would undermine the dollar and keep interest rates low, both gold-positive factors.
BNP Paribas cited waning expectations that QE is imminent in cutting its gold and silver forecasts for this year, by $140 to 1,715 an ounce and by $4.40 to $33.10 an ounce respectively.
"(Our economists') central scenario is now for further Fed monetary accommodation to be implemented only in the fourth quarter instead of June," it said.
"This change has significant implications for our gold price forecasts (and by extension for our silver price forecasts), given gold's tight positive relation with the level of market liquidity."
PHYSICAL DEMAND SOFT
Gold prices have been held in check in the last month by a dearth of physical demand, with buyers in key jewellery consumer India deterred by high prices and a weak rupee, exchange-traded funds reporting outflows and coin sales easing.
Some appetite returned for gold coins in May, with the U.S. Mint reporting sales of 10,000 ounces on the first day of the month, half the total sold in the whole of April. That was its worst month for gold coin sales since June 2008.
Holdings of the gold-backed exchange-traded funds monitored by Reuters, which issue securities backed by physical gold and which proved a popular investment during the financial crisis, fell 194,000 ounces in April and edged below 70 million ounces on Tuesday for the first time since Feb. 2.
"As much as the remarkable resilience of gold ETF investment is testament to the ongoing positive sentiment among longer-term players, in our view there's no doubt that the buying has dried up," UBS said in a note on Wednesday.
"In the current lacklustre environment, the market needs more than just resilience - significant ETF buying will have to resume in order to breathe some life back into gold," it added. "Absent that resuscitating factor, we think gold is likely to continue its aimless wander."
Silver was down 0.5 percent at $30.80 an ounce. Its underperformance lifted the gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, to 3-1/2 month highs.
Spot platinum was down 0.2 percent at $1,563.99 an ounce, while palladium was down 0.2 percent at $674.70.
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