Gold prices back above $1,800 an ounce

Gold prices climbed back above $1,800 an ounce on Friday, after data showing the U.S. created more jobs than expected, though a disappointing number of people chose to join the workforce last month and rising inflation dulled prospects for stronger economic growth, reports MarketWatch.

U.S. companies added 531,000 jobs in October, with that increase almost double the number of job gains in September and well above the 450,000 new jobs expected by economists polled by The Wall Street Journal.

The NFP data was "excellent and far exceeded expectations," but gold likely "benefitting from labor participation rate still holding steady below 62%; an overheated labor market would be about 1% higher," Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch. Data on Friday showed the labor participation rate at 61.6%.

The Federal Reserve is "always cautious when labor participation is not robust and pays less attention to the headline unemployment rate of 4.6% vs 4.8% - plenty of folks who could return to work [are] not doing so," said Wright.

"The tapering implementation is a ways off and not as drastic as some experts had feared or warned of," he said.

Traders have also focused on inflation, with the consumer price index and producer price index numbers due out next week, said Chintan Karnani, director of research at Insignia Consultants. "It is all about inflation and its potential impact on Fed's monetary policy for bullion."

Gold for December delivery was up $6.70, or 0.3%, at $1,800.20 an ounce on Comex after trading as high as $1,805.40. For the week, prices for the front-month contract traded about 0.8% higher.

December silver rose 4.9 cents, or 0.2%, at $23.96 an ounce, eying a weekly decline of 0.3%.

Despite the strong jobs data, Treasury yields fell on Friday, lowering the opportunity cost of holding nonyielding assets such as gold, with yield on the 10-year Treasury note down 1.481%, compared with 1.524% on Thursday.

Gold futures had climbed 1.7% on Thursday as Treasury yields also retreated after the Federal Reserve on Wednesday announced widely expected plans to begin tapering its bond purchases and signaled it would remain patient on raising interest rates.