Gold price finely poised as traders gear up for belated jobs report

The gold price consolidated last week's strong gains on Monday, continuing to hover around the $1,320 an ounce level as traders geared up for tomorrow's belated release of US employment numbers.

In early afternoon trade on the Comex market in New York December gold futures changed hands at $1,315.90 up slightly from Friday's close but off its highs for the day of $1,323.80.

Volumes were particularly light  with only 40% of the average daily number of  contracts of around 170,000 traded by 2pm EDT indicating caution ahead of a number of big economic numbers out this week.

Monthly US nonfarm-payrolls data will be released on Tuesday, after being delayed during the two-week US government shutdown.

US Federal Reserve Chairman Ben Bernanke has vowed that at the first signs of a solid economic recovery in the US, the bank will start tapering its stimulus program, but surprised markets in September when it kept the spigot open.

The Fed is eager to throttle back asset purchases running at $85 billion a month under its quantitative easing or QE program and the jobs number is a key consideration for the US central bank on whether to dial back or not.

The employment numbers can have a strong impact on the gold price and the value of the dollar, which usually move in opposite directions.

Chicago Fed president Charles Evans on Monday "all but ruled out" a change in policy at the bank's October meeting given the lack of economic data from the federal government shutdown:

Asked in an interview about a move at the final meeting for the year in December, Evans replied: "I think we need a couple of good labor reports and evidence of increasing GDP growth and it is probably going to take a few months to sort that one out."

The Fed's ultra-loose monetary policy is set to top $4 trillion by the end of the year and all that easy money inundating financial market has burnished gold's reputation as a hedge against inflation and a storer of wealth.

The gold price has increased more than 50% since QE1 when the ruling price was $837 an ounce.