LONDON -- Gold gained in choppy trade on Friday, as weaker-than-expected U.S. jobs data pushed the dollar down and lifted gold's appeal as an alternative investment.
But analysts said the market could witness a further sell-off after tumbling last week to a two-month low.
Gold rose as high as $909.70 an ounce after the data, but fell to $907.10/908.00 at 1343 GMT, against $903.40/904.20 late in New York on Thursday, when it gained more than $5.
"Gold is following the foreign exchange market and we expect the market volatility to continue. On the technical side, the upside trend is broken and we may head to the downside now," said Michael Kempinski, senior metals trader at Commerzbank.
"We saw heavy long liquidation last week, but the general position of the funds are still long here," he added.
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The dollar slipped after government data showed U.S. employers cut payrolls for a third month in a row in March, slashing 80,000 jobs for the biggest monthly job decline in five years as the economy headed into a downturn.
A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Gold hit a two-month low of $872.90 an ounce on Tuesday on fund selling before staging a modest rebound. It was still 12 percent lower than last month's lifetime high of $1,030.80 and dealers said jewellers showed buying interest at the lows.
U.S. gold futures for June delivery rose $1.20 to $910.80 an ounce.
"In the coming days, gold should trade in a wide range between $850-$950 an ounce. Whether gold will test the upper end of this range will depend on it going through and holding gains above the $ 910-$920 level," said Wolfgang Wrzesniok-Rossbach, head of sales at German precious metals trading group Heraeus.
Platinum fell to $1,980/1,990 from $1,985/1,995 an ounce, having risen more than 2 percent in New York on worries that South Africa's state utility could not meet electricity demand from precious metals miners.
South Africa's power crisis may last many years unless there is a sustained drop in electricity demand in Africa's largest economy, state power utility Eskom said this week.
Supply worries, caused by mining disruption in main producer South Africa, sparked speculative buying and propelled the price to record high of $2,290 an ounce on March 4.
Spot silver was at $17.46/17.51 an ounce, compared with $17.36/17.41 in New York, while palladium was flat at $436/441 an ounce.
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