Gold dropped below $1,200 an ounce on Friday and was headed for a fifth weekly decline in six, as the dollar rose towards 11-year highs ahead of US jobs data that could provide hints about the timing of a rate increase.

Spot gold was down 0.3 per cent at $1,194.60 an ounce by 1024 GMT. The metal hit a 10-day low of $1,192.65 in earlier trade and was down about one per cent for the week.

US gold for April delivery was down $2.30 an ounce to $1,193.90.

The dollar hovered around 11-year highs against a basket of major currencies ahead of the non-farm payroll numbers scheduled at 1330 GMT.

The US currency was helped by weakness in the euro, which stayed under pressure after the European Central Bank said it would start its €1 trillion bond-buying programme next week.

"We have the negative correlation with the dollar back on track and that has been hurting the sentiment this week," Saxo Bank head of commodity strategy Ole Hansen said.

Analysts polled by Reuters expect US payrolls to have increased 240,000 last month and the jobless rate to have ticked down to 5.6 per cent from 5.7 per cent.

"Strong NFPs may send gold falling sharply and swiftly, possibly to $1,180, followed by a slight dead cat bounce. Any number above 250,000 would likely have this effect," said Howie Lee, investment analyst at Phillip Futures.

But the metal could rally to $1,230 if the figure comes in below 230,000, Lee said.

Markets believe a strong report could prompt the Fed to soon increase US interest rates, a move that would further boost the dollar, in turn hurting demand for non-interest-bearing assets such as gold.

"Asia has been a buyer at these levels, however if they are not on the bid you'd expect the $1,190 area to be tested later in the day," MKS Group said in a note.

Prices on the Shanghai Gold Exchange suggested physical demand for gold in China, the second biggest bullion consumer, remained at healthy levels.

Chinese gold prices were about $4-$5 an ounce higher than the global benchmark.

Sustained interest for physical bullion typically gives support to prices, cushioning any downside pressure.

Spot silver fell to its lowest level in two months at $15.89 an ounce, while palladium dipped 0.2 per cent to $821.75 an ounce and platinum was down 0.1 per cent at $1,175 an ounce. - Reuters