Gold prices rallied as the market tried to gauge the potential impact of a weak US employment report on the Federal Reserve's monetary policy as the new coronavirus continues to cause economic uncertainty.
Spot gold rose 0.7% to $ 1,781.60 an ounce by 12:15 pm ET, avoiding what would have been a third straight week loss. US gold futures rose 1.0% to $ 1,780.50 an ounce in New York.
On Friday, the Bureau of Labor Statistics said 210,000 jobs were created during November, well below the expected growth of about 535,000 jobs by economists.
Bullion already held steady ahead of the employment report and has since climbed higher in initial reaction to weaker-than-expected employment data.
However, the US dollar first weakened after the release of the data and then strengthened again, making the dollar-denominated precious metal more expensive for holders of other currencies.
The labor force report also showed that wages rose less than expected last month, indicating that inflation could be higher. Gold has traditionally been viewed as a defense against rising prices.
The initial spike in gold prices suggested that "the market viewed the missed seal as a signal that the cut might not be accelerated," said Sookie Cooper, analyst at Standard Chartered.
But beyond this movement, prices are still looking for a downside after falling below the key $ 1,800 level, Cooper added.
Edward Moya, senior market analyst at brokerage OANDA, said the gold markets are now in a “wait and see” position amid uncertainty over the omicron option.
“It is unclear if you intend to attract many investors in the precious metal for security reasons, especially given that the stock market has been quite resilient,” said Moya.