By Stephanie Yang

Gold prices fell on Friday, after new jobs data showed stable economic growth and strengthened the case for a rate increase by the end of the year.

Gold for December delivery was recently down 0.1% at $1,302.70 a troy ounce on the Comex division of the New York Mercantile Exchange, after falling as low as $1,296.10 following the data release.

On Friday, the Labor Department said the U.S. economy added 161,000 jobs for the month of October. Economists surveyed by The Wall Street Journal expected employers to add 173,000 jobs.

While the number fell short of expectations, the solid jobs growth helped support market speculation that the Federal Reserve will raise interest rates at its policy meetingin December. Higher rates tend to hurt gold, which pays holders nothing and becomes less attractive compared with yield-bearing assets when borrowing costs rise.

"Temporarily, the gold rally is slowing," said George Gero, managing director of RBC Wealth Management. "But election jitters are keeping traders active. That's why you didn't have a bigger selloff."

Nervousness ahead of the U.S. presidential election has sent gold prices to a one-month high in the past few days, surpassing $1,300 for the first time since Oct. 4. Analysts say that the gold market should remain volatile leading up to the Tuesday vote.

"On the whole it is all about next week," said David Govett, head of precious metals at Marex Spectron. "The market will be in thrall to this and there is very little point in attempting anything longer term than a couple of hours as far as trading goes."

The WSJ Dollar Index was higher on Friday, up 0.1% at 87.71.A stronger dollar tends to hurt gold prices, as the dollar-denominated metal becomes more expensive to foreign buyers.

Write to Stephanie Yang at

(END) Dow Jones Newswires

November 04, 2016 09:27 ET (13:27 GMT)

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