Gold rose nearly 1 percent early on Friday, snapping a four-day losing streak, as disappointing US nonfarm payrolls data dampened talk of an early interest rate rise by the Federal Reserve and increased bullion's appeal as a hedge. The yellow metal, however, posted a 1 percent drop for the week, for a third consecutive loss. On Thursday, gold prices slid to a six-week low on reports showing strong US economic growth and wage increase.
Bullion gained after data showed US job growth slowed in July and the unemployment rate unexpectedly rose, pointing to slack in the labour market that could give the Fed room to keep interest rates low for a while.
The Labour Department said nonfarm payrolls increased 209,000 last month, below economists' expectation of a 233,000 job gain.
Unemployment rate also rose to 6.2 percent from 6.1 percent as more people entered the labour market.
"People were looking for a big payrolls figure and they didn't get one, so gold gained," said Matthew Turner, metals analyst at Macquarie.
Spot gold was up 0.9 percent to $1,293.01 an ounce by 2:36 pm EDT (1836 GMT), rebounding from Thursday's six-week low of $1,280.76.
Analysts said that gold's gains were capped when the metal failed to breach strong technical resistance near its 100-day moving average at $1,298.
US COMEX gold futures for December delivery settled up $12 an ounce at $1,294.80.
Demand for physical gold in Asia failed to pick up in a robust way despite the price drop on Thursday, a dealer in Hong Kong said.
Metals consultancy GFMS, a division of Thomson Reuters, warned on Thursday that buying in the main physical gold markets of China and India may not be strong enough to provide a floor for prices this year.
Meanwhile, sales of American Eagle gold coins by the US Mint dropped about 40 percent in July from a year earlier.
Gold prices remain up more than 7 percent this year, but most of those gains were made in the first quarter. The metal fell 3.4 percent in July, its biggest monthly drop of 2014.
Among other precious metals, silver was down 0.5 percent at $20.24 an ounce, while platinum inched up 0.3 percent to $1,458, and palladium dropped 0.9 percent to $859 an ounce.