Gold recovered late Friday in response to a U.S. non-farm payrolls report for February that failed to meet elevated expectations, prompting a drop in the dollar and Treasury yields.
The Labor Department data, which showed U.S. non-farm payrolls rose 235,000 last month, beat official forecasts but was not enough to satisfy those whose expectations had been boosted by a strong private payrolls number earlier in the week.
The figures shored up prospects for the Federal Reserve to hike interest rates this month, however. Anticipation of a March hike has put gold on track for its biggest weekly loss in four
months this week.
The metal hit a low of $1,194.55 an ounce on Friday, after slipping below $1,200 an ounce in the previous session for the first time since Jan. 31.
"Whisper estimates for job growth were probably a bit higher after the strong ADP (private payrolls) number," Commerzbank analyst Carsten Fritsch told the Reuters Global Gold Forum.
"Jobs growth was stronger than expected, but wage growth remains subdued, so the last link to higher inflation is still missing," he said. "That may keep the Fed at bay after the rate hike next week at least until June."