Gold edged higher on early Thursday as bargain hunters stepped in to buy after the metal hit fresh three-month lows in the previous session, ahead of Friday's nonfarm payrolls report. 

                 FUNDAMENTALS 

 * Spot gold was up 0.2 percent at USD 1,268.60 an ounce by 0058 GMT. Bullion touched a fresh low of USD 1,261.59 in the previous session, its lowest since June 24.

 * U.S. gold futures rose 0.2 % to USD 1,270.90 an ounce. 

* U.S. services sector activity rebounded to an 11-month high in September, an encouraging sign for economic growth that may increase the prospect of a Federal Reserve interest rate hike this year. 

 * Elsewhere, U.S. private employers added 154,000 jobs in September, below economists' expectations, a report by a payrolls processor showed on Wednesday. 

* Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund fell 0.03 % to 947.63 tonnes on Wednesday.