The front-month contract of international oil benchmark Brent was down 61 cents at USD 86.22 a barrel by 0233 GMT. Brent settled USD 2.12, or 2.5 percent, higher on Thursday, its largest percentage gain in a day since June 12.
Data on Thursday showed that new claims for US unemployment benefits held below 300,000 for a sixth straight week last week, suggesting the labour market was shrugging off jitters over a slowing global economy.
"Any period of dollar strength is going to weigh on gold," Mitsui Precious Metals analyst David Jollie said. "(But) we've moved from people having a very bearish sentiment to a more mixed sentiment, and a more bullish outlook."