By Katherine Dunn

LONDON--Gold prices inched lower on Friday in London under pressure from a stronger dollar, as traders awaited jobs data from the U.S. that will be released later in the day.

Spot gold was down 0.13% at $1,178.42 per troy ounce in midmorning European trade, after closing at the highest price since late-November on Thursday.

The dollar strengthened on Friday, after falling to its lowest level since mid-December on Thursday on weak economic data and a surge in the Chinese yuan.

Meanwhile, traders will wait for the December jobs figures from the U.S. on Friday, which could provide cues on the strength of the American economy, and furtherdirection for the U.S. dollar.

Gold has seen a strong week, despite Friday's decline, rising about 2.3% since trading began for the new year on Tuesday.

The strength of the dollar is likely to be one of the key drivers of the gold price over the next year, and further signs of a strong economy could mean the metal is facing a bearish year ahead.

"The first few days of this year have started positively for gold prices, " a pattern seen in several recent years, noted ABN Amro. "However, if U.S. data (excluding inflation data) continue to come in strongly as we expect, this positive short-term momentum is likely to fade."

Analysts have also noted that expectations of political uncertainty over the coming year could stoke further gains.

However, any further gains are unlikely to match the spike seen last January, said Carsten Menke, a commodities analyst at Julius Baer. In that period, concerns about Chinese growth andmarket stability provided gold with a sharp safe-haven rally.

"This year's growth backdrop is much more positive, which does not bode well for gold and warrants a cautious view," Mr. Menke said.

The other precious metals were mixed on Friday. Silver was down 0.72% at 16.50 a troy ounce, platinum was up 0.02% at $967.71 a troy ounce, and palladium was up 0.45% at $743.85 a troy ounce.

Georgi Kantchev and Biman Mukherji contributed to this article.

Write to Katherine Dunn at

(END) Dow Jones Newswires

January 06, 2017 06:37 ET (11:37 GMT)

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