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Gold held a decline after the European Central Bank downplayed the need for more economic stimulus and US filings for unemployment benefits unexpectedly dropped.

Gold prices slipped lower on Friday, but losses were expected to remain limited as a globally weaker U.S. dollar continued to lend support to the precious metal. Spot gold was slightly down 0.2 percent at $1,335.90per ounce by 0724 GMT. The metal was set for a nearly 1 percent gain this week.

The metal has given up much of its strong gains from earlier this week, when weak U.S. jobs data led investors to bet that a September rate rise was no longer on the cards, weakening the dollar.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.16% at $1,339.35, not far from Wednesday’s three-week high of $1,350.50. But sentiment on the greenback remained vulnerable after downbeat U.S. employment data published last Friday crushed expectations for an upcoming rate hike by the Federal Reserve.

"Gold prices have had ample of opportunity to sell-off, but there has been a lack of follow through selling. Conversely there has been regular dip buying," analysts at ScotiaMocatta said in a note. "As such, we think Gold's bull market remains in force, but upside progress may be gradual. In turn, this means it may be more sustainable."

Reference: Bloomberg, Reuters