SINGAPORE (Reuters) - Gold was little changed on Friday as investors awaited U.S. nonfarm payroll numbers to gauge the strength of economic recovery and the outlook for monetary policy.
The metal, however, was headed for its first weekly drop in three weeks as recent economic data already suggested that the U.S. economy was gaining steam.
Spot gold was trading nearly flat at $1,227.20 an ounce by 0016 GMT. It has lost 0.7 percent for the week.
The number of Americans filing new claims for unemployment benefits last week fell and planned layoffs hit a 13-1/2 year low in December.
Markets fear that a strong U.S. jobs report later today could prompt the Federal Reserve to further reduce its bond-buying stimulus. The Fed last month announced a $10 billion cut to its $85 billion monthly asset purchase programme.
Bank of America Merrill Lynch lowered its 2014 average gold price forecast to $1,150, citing an uncertain macro-economic environment and lack of investment demand.
Barclays said it expects gold prices to average $1,205 and test 2010 lows this year, as the metal is likely to struggle to find supportive catalysts.
Commodity exchange traded products suffered their worst year on record in 2013 as investors dumped gold holdings and joined the equity rally, data from BlackRock showed.
A whopping $42.9 billion was withdrawn from commodity ETPs in 2013, with gold ETPs accounting for $40 billion of those outflows.
(Reporting by A. Ananthalakshmi; Editing by Anand Basu)