Gold held above $1,550 on Friday, as the dollar steadied and European shares dropped ahead of U.S. jobs data which should give more clues on the health of the world's largest economy.
The metal matched a similar pattern in other commodities, such as copper, further recouping heavy losses seen in the previous session, as investors refrained from taking large bets ahead of the non-farm payrolls data.
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Gold edged up 0.1 percent to $1,554.04 by 1029 GMT, but it was still down about 1.7 percent on the week and heading for its second week of declines. It fell to a 10-month low at 1,539.74 on Thursday, weighed down by a jump in the dollar after the Bank of Japan unveiled ambitious monetary stimulus plans.
U.S. gold futures for June delivery also rose 0.1 percent to $1,554.40 an ounce.
"The market is on hold ahead of the non-farm payrolls, which is going to be crucial data to look out for," Standard Chartered analyst Dan Smith said.
"Generally, gold needs to find a floor first before we can turn more bullish and that floor is $1,530 ... The problem for now is that it didn't quite reach that point where everybody thinks it's cheap."
The U.S. non-farm payrolls data, due at 1230 GMT, is expected to show employers added 200,000 jobs last month. The numbers are being closely watched for clues on the strength of the U.S. economic recovery and the next step in the Federal Reserve's monetary policy.
"The threat for gold is that a strong print would give enough ammunition to the market for another push lower and test the closely watched $1,525 support level," UBS said in a note.
An improving growth trend in the United States has been a key driver for investors taking on more risk this year, but weaker-than-expected data this week on manufacturing activity and private sector hiring has suggested the momentum might be flagging.
"A significantly weaker-than-expected employment number could spark a powerful upside response given sentiment and the current level of shorts that would be forced to cover," UBS added.
The dollar, which was the main beneficiary of Thursday's announcement from Japan's central bank of a massive $1.4 trillion injection of liquidity into the economy to end decades of deflation, steadied against a basket of main currencies.
European shares edged to a one-month low ahead of the U.S. data. Asian shares had slipped due to concerns over bird flu in China and escalating tensions in the Korean peninsula.
ETFS HOLDINGS FALL AGAIN
Investor interest continued to recede on Thursday, with bullion holdings in major gold exchange traded funds dropping to their lowest level since August 2012.
Holdings of the largest fund, New York's SPDR Gold, declined another 87,063 ounces.
"Crucially, investor confidence in gold is at rock bottom with little chance of a sustained recovery where physical flows are not substantial enough to counter fund liquidations," VTB Capital said in a note.
China was absent from the physical market for a Thursday and Friday holiday, adding to the overall weakness in metals.
Those precious metals more widely used in industry were also biding time ahead of the U.S. jobs data, with investors taking a breather after the previous session's heavy losses.
Silver rose 0.3 percent to $26.96, after tumbling to its lowest level since July 24 in the previous session.
Platinum, which dropped to its lowest since late August on Thursday, was up 0.5 percent at $1,527.74. Palladium rose 0.8 percent to $729.50. (Additional reporting by Lewa Pardomuan in SINGAPORE; Editing by Charlotte Cooper)