LONDON: Gold eased on Friday as the dollar firmed ahead of a closely watched US payrolls report later, but the metal stayed on track for its best week in 10 months after bouncing back from three-week lows on Monday.
Gold's strong rebound, which saw it post its biggest one-day rise in more than a year, brought some buyers back into the market, analysts said, while physical demand also firmed.
Spot gold was down 0.1 percent at $1,204 an ounce at 1010 GMT, while US gold futures for December delivery were down $3.50 an ounce at $1,204.20.
Prices are up 3.2 percent this week, their biggest rise since February.
"There's an element of technical strength in gold and some physical underpinning," Mitsubishi analyst Jonathan Butler said. "(But) the macroeconomics are really what is driving this market."
"The essential story of a stronger US dollar and economic recovery in the United States is still very much intact," he said.
"We'll see whether the (payrolls) number is better or worse than expected, and gold can be expected to trade either way on the back of that." US payrolls data is due at 1330 GMT.
Analysts polled by Reuters expect employers added 230,000 new jobs to their payrolls last month, and for the unemployment rate to remain unchanged at 5.8 percent.
A run of upbeat US data has raised expectations that the Federal Reserve will raise interest rates before other central banks.
Higher rates boost the opportunity cost of holding non-yielding gold and lift the dollar, in which the metal is priced.
The dollar index was up 0.1 percent on Friday, with the euro sold after a European Central Bank meeting on Thursday that solidified expectations that it will conduct its first government bond-buying early next year.
In the physical markets, Chinese buying remained steady with premiums unchanged at about $1-$2 on Friday.
Data from the Istanbul Gold Exchange showed gold imports into Turkey more than doubled year on year to 46.9 tonnes in November, its strongest monthly imports in more than six years.
Silver was down 0.1 percent at $16.43 an ounce. Spot platinum was up 0.2 percent at $1,231.96 an ounce, while spot palladium was up 0.5 percent at $798.12 an ounce.
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