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Demand for bullion is expected to pick up ahead of festivals such as Dhanteras and Diwali, which is also a time when gold is traditionally given as a gift.
"(The Federal Reserve head's) comments from last week have put pressure on gold and we need to see the jobs data, which is likely going to be really good," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Spot gold had edged up 0.1 percent to USD 1,238.83 an ounce by 0250 GMT, after gaining 0.5 percent in the previous session.
St. Louis Fed President James Bullard was the latest to add his voice to policymakers supporting a rate hike, possibly as soon as in the next policy meeting in April.
China's stock markets were suspended less than half an hour after opening on Thursday after sharp falls triggered a new circuit-breaking mechanism for a second time since its introduction this week.
US nonfarm payrolls increased 215,000 in July, less than the 223,000 rise that economists had expected, although still seen in line with a tightening labour market.
The Fed will hold a two-day meeting that ends on Wednesday at which policymakers are likely to send more signals pointing to a rate rise later in the year as the US economy strengthens. That is negative for non-interest-paying bullion.
Gold edged up from a five-year low on Thursday as the dollar weakened, but the modest gains suggest bearish investors are still hovering in the market after an early-week rout led to bullion's deepest loss in nearly two years.
Bullion took a hit after Federal Reserve Chair Janet Yellen told Congress the US central bank is on track to lift interest rates this year if the US economy expands as expected, sending the dollar to a seven-week high versus a basket of currencies.
But bullion is still down so far for the week, its third in a row, amid weak physical demand in top consumers China and India. Prices have been trapped in a tight range with global uncertainties from Greece to China failing to spark safe-haven bids.
Asia shares rallied for a sixth straight session as investors chose to be optimistic that Greece would reach a deal with its creditors, while the dollar held broad gains as the prospect of US rate rises came back on the radar.
Traders were awaiting the critical US nonfarm payrolls report due later in the day for more clues on the economy and how it would impact the Federal Reserve's interest rate policy.
Many expect the Fed officials, who started a two-day policy meeting on Tuesday, to drop the word "patient" from their forward guidance on interest rates, potentially paving the way for a rate hike around June, the first since 2006.
Gold hovered near its lowest in over three months on Wednesday, hurt by consecutive losses in the last seven sessions as a robust dollar and expectations of higher US interest rates curbed appetite for the metal.
Spot gold was little changed at USD 1,202.10 an ounce by 0225 GMT, after dropping to USD 1,197.95 in the previous session as safe-haven bids receded. The metal recorded its fourth straight weekly decline on Friday.
Gold imports to top consumer India are set to jump in coming months after the Reserve Bank of India (RBI) eased gold import curbs, ahead of an expected cut in import duty in next week's budget.
Spot gold rose 0.3 percent to USD 1,237.40 an ounce by 0219 GMT, following a 0.4 percent drop on Tuesday that sent it closer to a three-week low of USD 1,228.25 reached last week
Gold edged up in light volume on Wednesday, trading in a narrow range as investors focused on an upcoming European Central Bank meeting and trends in equities prices against the backdrop of a better economic outlook.
The big story is gold. It shot above that USD 1,500 an ounce mark for the first time ever as worries over the outlook for the US economy boosted the metal as a safe haven whereas rising inflation helped lift Asian demand. Now gold prices are up 5% in the month of April.
