NEW YORK ( TheStreet ) -- Gold prices settled lower Monday with market action driven by a stronger U.S. dollar and profit-taking.

Gold for December delivery closed down $1 to $1,316.80 an ounce at the Comex division of the New York Mercantile Exchange, on light volume. The gold price traded as high as $1,321.30 and as low as $1,313.40 during Monday's session.

The U.S. dollar index was rallying 0.45% to $78.44 while the euro was falling 0.83% to $1.36 vs. the dollar. The spot gold price was slipping $3.90, according to Kitco's gold index.

Gold prices lost steam Monday as another record high settle on Friday of $1,317.80 an ounce triggered light profit-taking. Gold's upside was also tempered by a stronger U.S. dollar which gained against the euro on a State Department travel alert warning of a possible terrorist attack in Europe.

"The metals may look to consolidation," says James Moore, analyst at thebulliondesk.com in his daily metals report, "but we expect strong dip-buying interest from the physical and investment to underpin the market and continued diversification to ultimately drive the metals to fresh highs."

Gold, along with the broader market, is also in wait-and-see mode until Friday's U.S. unemployment report as well as Alcoa's ( AA) third-quarter earnings report Thursday, which unofficially kicks off earnings season. The gold price rallied 4.8% in September, pricing in a move by the Federal Reserve to print more money to lend to the government. The Fed action is expected to be announced at the Fed's next meeting on Nov. 2-3.

The jobs report on Friday could be a mixed bag for gold and the Fed. The unemployment rate is expected to rise to 9.7% but the private sector is expected to add 60,000 jobs, according to Briefing.com. If the number disappoints or is in line, analysts expect the green light for monetary easing. If the number surprises to the upside, analysts worry the Fed might not announce as large a bond purchase program which would hurt those traders building gold positions as a hedge against future inflation.

Scott Redler, chief strategic officer for T3Live.com, says gold prices can probably surge to $1,400 an ounce by the end of the year but "this is probably a spot ... to lighten up a little bit." Most analysts expect more volatility in the days ahead.

Gold is also looking to other world central bank meetings this week particularly out of Japan. The Bank of Japan's two-day policy meeting is expected to result in more monetary easing as Japan decreases the value of the yen in order to help exports and its struggling economy.

In addition, International Monetary Fund and World Bank leaders will meeting in Washington Friday and brewing currency wars will most likely be the topic of conversation. Every country wants their currency to be low in order to spur export demand and help their country's economy grow. Already the U.S. House of Representatives passed a bill which would allow higher taxes on Chinese imports to force China to let its currency rise in value.

Any kind of currency war would be good for gold as the metal becomes a more attractive form of money. The Financial Times reported that JPMorgan ( JPM) reopened a gold vault which has been inactive since the 1990s as investor demand for the physical metal pops.

JPMorgan stores the gold for Ishares Comex Gold Trust, which currently holds 3.1 million ounces and ETFS Physical Gold Shares ( SGOL), which has 752,017 ounces. Although the bank can store the gold with other custodians, it mainly holds the gold in vaults in New York, London, Toronto and Zurich.

Silver prices settled down 2 cents to $22.03 while copper lost 2 cents to $3.66.

Most Recent Quotes from www.kitco.com

Gold mining stocks, a risky but potentially profitable way to buy gold, were slipping Monday. Yamana Gold ( AUY) was down 1.92% to $11.23 while Freeport McMoRan Copper & Gold ( FCX) was down 2.45% to $86.95. Other gold stocks Gold Fields ( GFI) and New Gold ( NGD) were trading at $15.17 and $6.58, respectively.

Capital Gold ( CGC) was losing more than 4% after Gammon Gold ( GRS) announced it would buy the company for $288 million. Adam Graf, analyst at Dahlman Rose, in an industry note said that "this transaction would appear to be a good value for GRS shareholders." Graf has a buy rating for Capital Gold and a hold rating on Gammon.


More on Gold
Gold Price News
How to Invest in Gold

-- Written by Alix Steel in New York.

>To contact the writer of this article, click here: Alix Steel.

>To follow the writer on Twitter, go to http://twitter.com/adsteel.

>To submit a news tip, send an email to: tips@thestreet.com.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

More from Stocks

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

50 Stocks That Could Be Shredded If a U.S. Trade War With China Ignites

50 Stocks That Could Be Shredded If a U.S. Trade War With China Ignites

Why Starbucks Latest Data Reveal Should Worry Investors

Why Starbucks Latest Data Reveal Should Worry Investors