Gold slipped on Friday to extend its losses after posting biggest May drop in three decades last month, as investors went on a selling spree of assets seen as higher risk like stocks and commodities on mounting concerns over the financial health of Greece and Spain.

The single currency, euro, fell to another two-year low against the dollar on growing concerns about how Spain would be recapitalizing its ailing banking sector and fixing its public finances.

Spot gold was down 0.7 percent at $1,552.60 an ounce at 5.26 a.m. EDT, while U.S. gold futures for August delivery were down $10.10 an ounce at $1,554.10.

"The payrolls number today could be important in terms of whether it shows ongoing weakness," Deutsche Bank analyst Michael Lewis said. "If we do see that, that could introduce quantitative easing speculation, but at the moment, Europe and downside risks to the euro are the problem for gold."

"We have had quite a big reduction in speculative length for gold, and we're not seeing any significant outflows from exchange-traded funds," he said. "But dollar strength is going to be the big problem over the next few weeks."

Brent crude oil fell below $100 a barrel for the first time since October 2011 and base metals like copper and aluminum also declined.