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.
Spot gold was up 0.12 percent at $1,202.16 an ounce, while U.S. gold futures for April delivery fell $1.80 to settle at $1,201.40.
"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."
Fed Chair Janet Yellen said last week the central bank was poised to lift rates provided jobs and inflation data held up, comments seen as cementing plans for an increase at the Fed's March 14-15 meeting.
Gold is highly sensitive to rising U.S. interest rates as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Pointing to softening investor appetite, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 2.7 tons on Thursday, bringing the total outflow for the week so far to 6.5 tons.
Among other precious metals, silver fell 0.44 percent at 16.87 per ounce, after hitting its lowest since Jan. 27 at $16.78. Palladium fell 0.25 percent at $744.90 per ounce.
Platinum rose 0.24 percent on Friday at $934.49. However, platinum has already fallen nearly 6 percent this week, having earlier touching its lowest since Jan. 4 at $928.5.