Gold fell below the key level of USD 1,200 an ounce on Friday and was on track for its worst week in four months, pressured by a stronger dollar ahead of the closely-watched US non-farm payrolls report due later in the day.


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Spot gold was down 0.4 percent at USD 1,196.21 per ounce at 0727 GMT, after touching USD 1,195.85 earlier in the session, its weakest since Jan 31.


The yellow metal has shed over 3 percent so far this week in what could be its biggest percentage decline since the week ended Nov 11, 2016.


US gold futures fell 0.6 percent to USD 1,196.1.


The dollar firmed to six-week highs against the yen as investors awaited US jobs data that is likely to reinforce expectations of a Federal Reserve rate hike next week.


The dollar index was up 0.1 percent at 101.93.


"The precious complex has extended the overnight declines during early Asian trade and we expect this to continue leading into tonight`s NFP (non-farm payroll) print as the USD sees support," MKS PAMP Group trader Sam Laughlin said.


Investors are waiting for February non-farm payrolls data as a barometer of the U.S. economy after Fed Chair Janet Yellen said last week the central bank was poised to lift rates provided jobs and inflation data held up.


Her comments were seen as cementing plans for an increase at the Fed`s March 14-15 meeting.


The ADP National Employment Report showed its biggest increase in over a year in February, suggesting the economy remains on solid ground.


The Fed will raise interest rates next week in response to a series of strong economic data, according to all of more than 100 economists polled by Reuters.


"Gold will be under pressure going into the FOMC meeting and hover around the USD 1,185-USD 1,190 level," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.


Higher interest rates typically pressure gold prices because they raise the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.


Spot gold may break a support at USD 1,198 per ounce and fall into a zone of USD 1,187- USD 1,193, according to Reuters technical analyst Wang Tao.


Meanwhile, holdings of the SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, fell 0.32 percent on Thursday.


In other precious metals, silver was down 0.6 percent at USD 16.85 per ounce, after hitting its lowest since Jan 27 at USD 16.83.


Platinum was up 0.1 percent at USD 933.05 per ounce, after touching its lowest since Jan. 4 at USD 928.5.


Palladium fell 0.3 percent to USD 744.60 per ounce.