Gold prices edged back into positive territory on Friday after a report showed the U.S. economy added fewer jobs than expected last month, fuelling speculation the Federal Reserve may turn to further monetary easing to boost growth.
The data, which is seen as a key gauge of the economic recovery, showed only 115,000 more jobs were created last month, against expectations for 170,000. The dollar, a key driver of gold prices, hit session lows after the numbers.
Spot gold was up 0.1% at $1,637.71 U.S. an ounce late Friday morning, off an earlier low of $1,626.50. U.S. gold futures for June delivery were up $3.10 an ounce at $1,637.90 U.S.
A fresh round of quantitative easing would undermine the dollar and keep real interest rates at rock-bottom levels. Speculation that such measures could be on the cards has been a major driver of higher gold prices this year.
Spot prices have fallen nearly 2% so far this week, their biggest weekly loss since mid-March, after a run of better-than-expected economic data dampened talk of more easing.
The euro steadied against the dollar, meanwhile, depressed by weak euro zone services data and ahead of Sunday's French and Greek elections, the results of which may stir doubts over their commitment to fiscal austerity.
In France, socialist front-runner Francois Hollande has promised to shift the debate in Europe towards promoting growth if he is elected. Greek voters angry with economic hardship are expected to punish traditional parties in an election that could plunge the country into new political chaos.
Euro-priced gold was up 0.1% at 1,244.91 euros an ounce, but is on track to fall 0.7% this week.
From a technical perspective, a breach of support for spot prices around $1,628 U.S. an ounce could trigger a move back to $1,612-1,615 U.S. and from there towards $1,600 U.S., analysts who use past price moves to predict the future direction of trade said.
Among other precious metals, silver recovered after falling to a 3-1/2 month low at $29.75 U.S. but was still on track to fall 4.5% on the week, having slipped below $30 U.S. an ounce for the first time since mid-January.
It was later up 0.3% at $30.15 U.S. If it closes the week in the red, it will have fallen for eight out of 10 weeks.
The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, rose to a 3-1/2 month high of 54.6 on Friday.
Spot platinum was down 0.1% at $1,525.25 U.S. an ounce, while spot palladium was up 0.3% at $657.98 U.S. an ounce.
