Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday on a continued reaction to expectations for the U.S. Federal Reserve's rate hike.

The most active gold contract for April delivery fell 1.8 U.S. dollars, or 0.15 percent, to settle at 1,201.40 dollars per ounce.

Investors are primarily focused on the expectations for an increase in the Federal Reserve's rate hike. They now believe the Fed may raise rates from 0.75 to 1.00 during the March FOMC meeting.

According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 90 percent at the March meeting and 86 percent for the May meeting, along with a 8 percent chance of an increase to a 1.0 rate.

Strong U.S. data also put pressure on the precious metal as a report released by the U.S. Department of Labor showed non-farm payrolls increased by 235,000 during the month of February, which was above expectations, and the unemployment rate fell to 4.7 percent. Analysts note that this was better than expected and will likely have an impact on thinking for the U.S. Fed's rate hike.

The U.S. Dow Jones Industrial Average rose by 43.62 points, or 0.21 percent as of 19:30 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Gold was given support as the U.S. Dollar Index fell by 0.83 percent to 101.18 as of 1930 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Traders are waiting for Monday of next week when the labor market condition index is released, on Tuesday the FOMC meeting begins and the producer price index is released, on Wednesday the FOMC announcement is released along with the consumer price index and retail sales reports.

Silver for May delivery dropped 11.3 cents, or 0.66 percent, to close at 16.923 dollars per ounce. Platinum for April delivery rose 1 dollars, or 0.11 percent, to close at 938.20 dollars per ounce.