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Gold bounced 1% on Friday as the dollar retreated after U.S. jobs data was mostly in line with expectations, but were still bound for a third consecutive weekly fall pressured by an elevated interest rate environment.

Spot gold rose 0.9% to $1,711.00 per ounce by 1347 GMT. Prices were still down 1.5% for the week so far, having touched a six-week low of $1,687.60 on Thursday.

U.S. gold futures advanced 0.7% to $1,720.40.

"The jobs numbers were very close to market expectations. The market is deeming it as a goldilocks number as it doesn't suggest weakness, but is not too strong to prompt an even more aggressive Fed," said Jim Wyckoff, senior analyst at Kitco Metals.

"Gold is kind of seeing a relief-short covering rally."

Nonfarm payrolls increased by 315,000 jobs last month, the Labor Department said in its closely watched employment report. Economists polled by Reuters had forecast payrolls increasing 300,000.

The dollar index slipped 0.4%, making gold cheaper for overseas buyers while U.S. Treasury yields were also lower for the day. [USD/]

"A slightly weaker US dollar and U.S. short-term Treasury yields have given gold some relief recently. However, this has not changed the underlying downward trend in gold prices," said Capital.com analyst Piero Cingari.

Gold has been pressured off late as global central banks raise interest rates to fight soaring inflation. Higher rates increase the opportunity cost of holding the non-yielding asset.

Calls for an unprecedented 75-basis-point lift to interest rates from the European Central Bank next week are on a knife's edge, a Reuters poll found.

In physical markets, gold premiums jumped in top consumer China, while a drop in local prices boosted demand in India. [GOL/AS]

Spot silver rose 0.7% to $17.98 per ounce, platinum gained 1% to $836.87 and palladium was flat at $2,012.64.

(Reporting by Ashitha Shivaprasad and Arundhati Sarkar in Bengaluru; Editing by Krishna Chandra Eluri)