Gold price inches up on thin trade as stocks ease

But investor sentiment remained dour as outflows from exchange-traded funds continued and demand failed to pick up even though prices remain near three-year lows.

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Markets are also awaiting US nonfarm jobs data later this week for clues on the strength of the world's biggest economy and on how quickly the Fed might act to taper its bond buying.

"There was some buying when Shanghai opened but not much after that," said Yuichi Ikemizu, a branch manager for Standard Bank in Tokyo. "People are adjusting their positions before the US holiday on Thursday."

US markets are shut on Thursday for the Independence Day holiday.

Spot gold rose 0.54 percent to USD 1,248.05 an ounce by 0243 GMT, while US gold was little changed at USD 1,247.30. Spot gold fell 0.9 percent on Tuesday as the dollar strengthened.

Two senior Fed official said on Tuesday that the bank's monetary policy to support the economy will likely be warranted for some time to come.

Bullion, typically seen as a hedge against inflation, has been under pressure since Fed Chairman Ben Bernanke said last month the US economy was recovering strongly enough for the central bank to begin tapering its stimulus in the next few months, and possibly end the programme in mid-2014.

Gold posted its biggest ever quarterly loss of 23 percent for the April-June period on fears the Fed would end its USD 85 billion monthly bond purchases.