Gold bounced on Friday from the lowest in nearly 17 months after weak U.S. jobs data pushed the dollar lower and a Chinese central bank move lifted its currency.
Spot gold was up 0.49 percent at $1,213.49 an ounce, erasing losses after earlier dropping to its lowest since March 15 last year at $1,204. U.S. gold futures for December delivery settled up $3.10 to $1,223.20.
The dollar index slipped into negative territory after data showed U.S. job growth slowed more than expected in July, likely due to companies' struggles to find qualified workers. Earlier, the dollar had climbed to a two-week high against a basket of major currencies and scaled a 14-month peak versus the Chinese yuan.
China's offshore yuan also reversed, rising sharply after the forward foreign exchange risk reserve requirement ratio was hiked to 20 percent from zero.
"I think gold is close to bottoming out. Whether its $1,200, $1,210 or $1,190, it's impossible to tell," said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam, adding that speculators will probably want to test the $1,200 level. "Gold is getting cheap and positioning wise, that should be a reason for bottoming out. The shorts are relatively big."