Gold steadied on Friday after two losing sessions but was headed for its second week of losses in three on expectations of a robust U.S. jobs number and continued selling in the top bullion-backed exchange-traded fund.
Holdings in the SPDR Gold Trust dropped 2.39 tonnes to 785.55 tonnes on Thursday, after losing 4.19 tonnes on Wednesday.
The fund saw an outflow of 25 tonnes in April, the first monthly outflow after two months of inflows and worst since December. Its movements are a good measure of underlying investor sentiment.
Spot gold was up 0.1 percent at $1,284.88 an ounce by 1006 GMT, ranging in the narrowest trade for four months. It was down about 1.4 percent for the week.
U.S. gold futures for June delivery rose 0.7 percent to $1,284.20 an ounce.
Investors were eyeing the U.S. April nonfarm payrolls report, due to be published at 1230 GMT, for further clues on the economy, which has shown strength in recent weeks after a severe winter hurt the first quarter.
Gold prices would come under pressure if growth exceeded economists' expectations for a 210,000 increase in jobs and a fall in the unemployment rate to 6.6 percent.
Earlier in the week, the Federal Reserve looked past a dismal reading on first-quarter U.S. growth and gave a mostly upbeat assessment of the economy's prospects as it announced another cut in its massive bond-buying stimulus.
"For gold, the salience of the nonfarm payrolls seems somewhat reduced by the Fed seemingly being on auto pilot with regards to its tapering activity," Macquarie analyst Matthew Turner said.
"A bad number, given the GDP data earlier this week, would call into question the strength of the economy, but seems unlikely to change the Fed's policy."
In wider markets, the dollar inched up from three-week lows against a basket of currencies on expectations of a robust U.S. jobs number, while 10-year U.S. Treasury yields held above two-month lows of 2.6 percent hit in the previous session.
Returns from U.S. bonds are closely watched by the gold market, given that the metal pays no interest.
"The inability of gold to rally despite U.S. Treasury 10-year yields falling highlights that there is little conviction in the gold market at present, and we maintain the view that prices could retrace further," ANZ said in a report.
Gold, often seen as an insurance against geopolitical risks, failed to be lifted by safe-haven buying after violence escalated in eastern Ukraine between government forces and pro-Russian separatists.
In the physical markets, demand has picked up slightly this week but was still lower than last year's levels.
With markets in top buyer China closed for a holiday, investors are looking to India, the second biggest consumer, for support.
India is celebrating Akshaya Tritiya on Friday, the second-biggest gold buying festival when it is considered auspicious to buy gold.
Silver, with a 2.4 percent weekly loss, is headed for its worst performance in six weeks. It was up 0.6 percent to $19.12 an ounce. Spot platinum rose 0.2 percent to $1,420.24 an ounce, while spot palladium rose 0.2 percent to $811.50 an ounce.