Gold Prices Slide on Profit-Taking (Update 1)

Updated from 10 a.m. EDT with settlement prices

NEW YORK ( TheStreet) -- Gold prices pared back gains Monday as investors took profits from Friday's surprise bump following a dismal monthly jobs report.

Gold for December delivery dipped $8.70 to $1,731.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,742.30 and as low as $1,729.20 an ounce, while the spot price was losing $9.70, according to Kitco's gold index.

"This is the time as things continue to climb that wall of worry, as they like to say, where smart investors start paring back risks slowly," said Oliver Pursche, co-portfolio manager at GMG Defensive Beta Fund.

Silver prices for December delivery fell 57 cents to settle at $33.63 an ounce, while the U.S. dollar index was gaining 0.30% to $80.41.

The Federal Reserve reconvenes this Wednesday to discuss forward-looking monetary policy. Many analysts expect the two-day meeting to results in the announcement of another round of quantitative easing, or so-called QE3.

Another asset-purchase program, as well as an extension of the central bank's promise to keep interest rates at the current historic lows beyond late 2014, would be an attempt to shore up a poor labor market, which Bernanke has called a "grave" concern.

Gold's recent rally could see more gains through the end of this year, said one analyst.

"Short term, a pullback would be normal, but my work indicates that we're in a new up-cycle for gold and it would continue probably into next June," said David Banister, chief investment strategist at TheMarketTrendForecast.com. "We might see some more pickup in October."

Economic data from China earlier Monday showed weaker-than-expected exports from the country, as overseas shipments bumped up in August 2.7% year over year. Economists were expecting a 2.9% gain, according to a Bloomberg News survey.

The underperformance may suggest a slowing in China's economy, but Beijing's announcement on Friday of a massive infrastructure plan to stimulate the economy could offset those worries.

Gold mining stocks closed mostly lower Monday. Eldorado Gold ( EGO) sank 3.5%, while Barrick Gold ( ABX) was down 1.9%.

Among other mining stocks, Newmont Mining ( NEM) shed 0.64% and Yamana Gold ( AUY) dropped 2%. NovaGold Resources ( NG) gained 0.59% on Monday.

-- Written by Joe Deaux in New York.

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