Gold fell in choppy trading on Friday as the dollar rose in the wake of U.S. non-farm payrolls data for December, prompting traders to cash in gains from the metal's rally to 3-1/2 month highs this week.
The metal remains on track for a fourth straight weekly gain, however, for the first time since April. It has risen nearly 1 percent in the first trading week of the year, having climbed by 13 percent in 2017.
That has left gold looking overstretched, ABN Amro analyst Georgette Boele said. "I think when the rest of the market returns, gold prices will be lower and the U.S. dollar will recover."
The dollar see-sawed in the wake of data showing U.S. job growth slowed more than expected last month, before turning higher. A pick-up in monthly wage gains pointed to labor market strength that could pave the way for the Federal Reserve to increase interest rates in March.
Traders overall stuck to their conviction that the Federal Reserve will raise rates twice this year, a Reuters analysis of fed funds futures contracts traded at CME Group suggested.