Jobs Report Sinks Gold

Gold for immediate delivery was selling at $572.20 an ounce recently, down from $602 at the beginning of the week, reflecting a broader dollar rally over the past few days. Bullion prices tend to move inversely with changes in the price of the dollar.

December dated gold contacts closed at $576.80 on the Comex division of the New York Mercantile Exchange, $1.30 higher for the day after morning weakness. The exchange-traded funds that track the sector followed suit: shares of streetTracks Gold Shares (GLD - Cramer's Take - Stockpickr) and iShares Comex Gold Trust (IAU - Cramer's Take - Stockpickr) were virtually unchanged.

Separately, the Economic Cycle Research Institute says its Future Inflation Gauge dropped to 120.3 in September, marking a 14-month low. That compares to an August figure of 121.7, and the prospect of reduced fears of inflation may be reducing gold's allure as an inflation hedge.

"The downturn has become somewhat pronounced and begins to give evidence that perhaps the Fed will have more wiggle room in easing monetary policy," says Lakshman Achuthan, managing director at ECRI.

"Gold is at times influenced by the outlook for inflation, however as a leading indicator it can be erratic because of periods of speculation," Achuthan adds.

At the retail level, New Orleans-based coin dealer Blanchard says the dip in prices has brought out the buyers, with last week marking one of the firm's strongest weeks for bullion sales in the past 12 months.