By Stephanie Yang

Gold prices traded higher on Friday, reversing losses from a positive jobs report as investors looked ahead with caution to the U.S. presidential election.

Gold for December delivery settled up 0.1% at $1,304.50 a troy ounce on the Comex division of the New York Mercantile Exchange, after trading 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 interestrates at its policy meeting in 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 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, in a Friday note. "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."

A tight race has kept markets on edge in the days leading up to the election, with analysts speculating that either major party candidate could send gold prices higher.

"Because people don't know [who will win], they're just doing what they should do" in times of uncertainty, said Timothy Major, a broker at Paulson Investment Company in Idaho.

Write to Stephanie Yang at

(END) Dow Jones Newswires

November 04, 2016 14:59 ET (18:59 GMT)

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