 "Gold hovers near $1,580/oz; U.S. jobs data in focus")
The February non-farm payrolls numbers, due at 1330 GMT, is expected to show moderate job growth, after data this week suggested improvement in the labour market.
Since the Federal Reserve has pegged its monetary policy to the unemployment rate, a surprise in jobs data would fuel speculation over the Fed's next move and shift sentiment in gold, which rode ultra-loose monetary policy to record highs in the past few years.
"If the jobs data undershoots expectations, it would be positive for gold," said Li Ning, an analyst at Shanghai CIFCO Futures.
But resistance at the $1,600 level has been stubborn as investors kept pulling money out of gold, Li said.
Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, fell 1.805 tonnes to a more than 16-month low of 1,243.05 tonnes on March 7, resuming a decline after pausing for one session.
Spot gold was flat at $1,578.36 an ounce by 0647 GMT, on course for a rise of 0.2 percent for the week after three weeks of declines.
U.S. gold edged up 0.2 percent to $1,577.80.
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Technical analysis suggested spot gold remains neutral in a range of $1,564 to $1,589 per ounce, and an escape will point to a future direction, said Reuters market analyst Wang Tao.
The dollar index inched up, paring some losses of the previous session as the euro rallied after the European Central Bank refrained from fresh monetary stimulus. A stronger greenback pressures dollar-priced commodities by making them more expensive for buyers holding other currencies.
Signs emerged that U.S. lawmakers were working to solve the budget standoff, further dampening gold's appeal as a safe haven bet against fiscal chaos.
"Should an accord be reached, we could see yet another round of selling in gold, as the 'deficit prop' that has been instrumental in the bullish argument for the precious metal will look somewhat more wobbly," Ed Meir, an analyst at INTL FCStone, said in a note.
In contrast to gold's lacklustre performance, platinum and palladium thrived with an improving economic outlook. Spot palladium rose to a more than two-week high of $758.50 and was headed for a weekly rise of 5 percent, its sharpest in more than three months.
Spot platinum traded up 0.4 percent to $1,597.49, on course for a 1.7 percent weekly gain, its biggest in a month.
Spot silver edged down 0.2 percent to $28.80, headed for a 0.9 percent gain from a week earlier, snapping a four-week losing streak.
Holdings in iShares Silver Trust, the world's top silver ETF, have increased 561.52 tonnes so far this year, exceeding the total inflow in 2012 at 479.17 tonnes, even though the underlying silver prices have dropped nearly 5 percent this year.