The dollar pushed higher on Friday and Asian stocks clawed their way off session lows, also weighing on gold.
Spot gold gained 0.8 percent to $1,252 an ounce, while U.S. gold futures for February delivery settled $11.70 higher at $1,251.90 an ounce, up 0.3 percent on the week.
The latest economic data from the United States showed that the number of Americans filing new claims for unemployment benefits fell for the second consecutive week last week, suggesting a sharp step-down in job growth in December was likely to be temporary.
The better labour market tone was also captured by a survey on Thursday showing an acceleration in manufacturing activity in the Mid-Atlantic region, accompanied by a rise in factory jobs.
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