Gold held onto its biggest monthly gain since July as investors awaited fresh data on the U.S. economy to feed the debate about inflation.

Bullion wiped out losses made earlier this year with a 7.8 per cent advance over May amid signs of accelerating inflation. Patchy economic data has also lifted gold, boosting expectations central banks will put off rate hikes.

Key data this week include U.S. jobs figures on Friday, following a surprisingly poor reading last month that highlighted potential headwinds to economic recovery. The Bloomberg Dollar Index is threatening to fall to its lowest since 2014 after a second monthly decline in May.

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“Momentum in the gold market remains strong, with investor inflows picking up sharply,” Australia & New Zealand Banking Group Ltd. wrote in an emailed note. “Thus a weak payrolls number on Friday could jolt prices even higher.”

Rising prices are again drawing investors via exchange-traded funds -- a major driver of last year’s rally. Money managers have also increased their net bullish gold bets to a 20-week high, CFTC data on futures and options show.

Spot gold rose 0.1 per cent to US$1,909.35 an ounce by 1:03 p.m. in London. Bullion is up 0.5 per cent this year, but still well short of the record US$2,075.47 hit in August. Silver rose, while platinum fell and palladium was little changed.