Gold Pulls Back Well Off Best Levels But Closes Modestly Higher

(RTTNews) - After moving sharply higher early in the session, the price of gold gave back ground over the course of the trading day on Friday but managed to close modestly higher.

Gold for December delivery inched up $5.70 or 0.3 percent to $1,999.20 an ounce after reaching a high of $2,011.90 an ounce.

The uptick by the precious metal came amid a steep drop in the value of the U.S. dollar, with the U.S. dollar index tumbling by 1.1 percent to its lowest levels in well over a month.

The plunge by the dollar and subsequent increase by the price of gold came after the Labor Department released a report showing U.S. employment rose by less than expected in the month of October.

The closely watched report said employment climbed by 150,000 jobs in October after jumping by a downwardly revised 297,000 jobs in September.

Economists had expected employment to increase by 180,000 jobs compared to the surge of 336,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate crept up to 3.9 percent in October from 3.8 percent in September. The unemployment rate was expected to remain unchanged.

The data added to optimism the Federal Reserve is done raising interest rates after the central bank left rates unchanged for the third time in four meetings earlier this week.

However, the price of gold once again had difficulty holding above the $2,000 an ounce level and pulled back well of its highs as the day progressed.

"This is clearly a big psychological barrier and momentum indicators suggest it may be a struggle at this time," said Craig Erlam, senior market analyst at OANDA.

He added, "There's been a lot of positive economic data and Fed commentary recently and if that hasn't been enough to deliver a significant breakout, you have to question whether the rally of the last month has run its course."