Gold prices steadied on Friday but were on track for their biggest weekly fall since May after progress on U.S. tax reform fueled optimism about the U.S. economy and boosted the dollar, making bullion more expensive for holders of other currencies.
Stronger-than-expected U.S. employment data on Friday also demonstrated healthy economic growth and suggested the Federal Reserve will raise interest rates next week, as expected.
Spot gold was up 0.13 percent at $1,247.91 an ounce at 11:27 a.m. ET, but remained near Thursday's low of $1,243.71, the weakest since July 26. It had fallen 2.5 percent this week, its third consecutive weekly fall and the biggest since early May.
U.S. gold futures were 0.23 percent lower at $1,250.20 an ounce.
"You can put it down to the strength of the dollar and the ebullience of investors regarding equities and all things risk-on," said ETF Securities analyst Martin Arnold. "When in such a positive mindset investors don't look for defensive assets like gold."
Wall Street was set to open higher on Friday after the U.S. jobs data. Selling of gold was triggered this week after it broke below $1,260, the bottom of its trading range since September, and plunged below its 200-day moving average for the first time since July.