Gold slipped on Friday as Asian stocks and the dollar gained after the European Central Bank said it could cut interest rates further, but investors were waiting for US jobs data later in the day for stronger cues.
Bullion has been trading in thin volumes this week as investors were reluctant to bolster positions ahead of the US Independence Day holiday on Thursday and the nonfarm payroll report on Friday.
The payrolls data at 1230 GMT will give a better idea of when the Federal Reserve will begin tapering its $85 billion monthly bond-buying stimulus. Chairman Ben Bernanke has said the scale-back could begin in the next few months.
“The market is looking towards payrolls for direction,” said Victor Thianpiriya, commodities analyst at Australia and New Zealand Banking Group.
“A downside surprise to the nonfarm payroll numbers will result in sharp short-covering as the market remains short.”
ANZ is expecting nonfarm payrolls to increase by 140,000, while the market consensus is at 165,000.
Spot gold had dropped 0.6 percent to $1,242.16 an ounce by 0650 GMT. US gold was down nearly $11 at $1,241.30.
