Gold rebounds as U.S. dollar pulls back after jobs data

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Friday as the U.S. jobs data gave support to the precious metal.

The most active gold contract for February delivery rose 8.4 U.S. dollars, or 0.72 percent, to settle at 1,177.80 dollars per ounce.

Gold was given extensive support as a report released by the U.S. Department of Labor showed the average hourly earnings decreasing by 0.1 percent during the month of November, and the labor participation rate decreasing to 62.7 during the month.

Analysts note that these two figures were worse than expected and gave support to the precious metal, but on a positive note, non-farm payrolls rose by an as-expected 178,000, and the unemployment rate decreased to 4.6 percent, the lowest level since 2007.

The U.S. dollar reacted to this news in addition to gold and may have compounded the effect the report had on the precious metal. The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, rose by 0.17 percent to 100.78 as of 1845 GMT.

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.

The implied probability of a Federal Reserve rate hike fell slightly in the wake of this employment report's release, but still remains at a near-certain high level.

Investors believe the Fed may raise rates from 0.50 to 0.75 during the December 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 95 percent at the December meeting and 95 percent for the February meeting.

Before the release of Friday's employment report, both figures were at 99 percent.

Silver for March delivery added 32.6 cents, or 1.98 percent, to close at 16.832 dollars per ounce. Platinum for January delivery dropped 21.4 dollars, or 2.35 percent, to close at 932.70 dollars per ounce. Endit