Economists polled by Reuters had expected non-farm payrolls to rise 149,000 and the unemployment rate to hold steady at 6.6 percent.
Gold futures for April delivery settled 1 percent lower at $1,338.20 an ounce.
Spot gold fell as much as 1.5 percent to a session low of $1,329.35 an ounce, and was trading down 1 percent at $1,338.
"In the short term, given the better-than-expected data, and provided nothing happens in Ukraine over the weekend, gold could fall below $1,330," VTB Capital analyst Andrey Kryuchenkov said.
"We need another month or two of sustained better-than-expected jobs data out of the U.S., which I think we will have because the weather will also improve, to see gold pressured even lower."
The stronger jobs figures bolstered the dollar, which rose 0.1 percent versus a basket of currencies, while U.S. shares opened higher on Wall Street.