By Zandi Shabalala
LONDON (Reuters) - Gold inched higher on Friday ahead of U.S. jobs data expected to boost confidence in the world's largest economy but remained on track to record its fourth straight week of losses.
The market is expecting a strong reading of U.S. non-farm payrolls and along with positive factory data on Thursday should cement the case for an interest rate increase this month.
Bullion is highly sensitive to rising interest rates, which make the non-yielding asset less attractive while boosting the dollar, in which it is priced.
In narrow trade, spot gold edged 0.1 percent higher to $1,171.96 an ounce by 1251 GMT. The metal fell to its lowest since Feb. 5 at $1,160.38 in the previous session, and is down 0.7 percent so far this week.
U.S. gold futures gained 0.3 percent to $1,173.
Capital Economics commodities economist Simona Gambarini said a December rate rise had already been factored in to gold prices and that U.S. president-elect Donald Trump was uppermost in investors' minds.
"Most investors are now looking at 2017 to see what's going to happen with Trump, what policies he will implement and the inflationary impact of those policies," Gambarini said.
The dollar index, which measures the greenback against a basket of major currencies, slipped by about 0.1 percent.
"With a rate rise in a couple of weeks almost certain, the dollar will remain firm and gold will remain pressured, although we could see a bit of book squaring in the run up," said Marex Spectron's head of precious metals, David Govett.
"This means some short-term dollar weakness, which may give gold a lift."
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 1.54 percent to 870.22 tonnes on Thursday and fell more than 6 percent last month.
Silver fell 0.7 percent to $16.37 an ounce while platinum rose 0.8 percent to $918.
Palladium shed 1.7 percent to $737.78, having touched its highest since June 2015 at $774.60 in the previous session, but remained set for a fifth straight weekly gain.
(Additional reporting by Apeksha Nair in Bengaluru; Editing by David Goodman and Susan Thomas)
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