Gold headed lower in early trading on Friday as traders nervously awaited the results of the House of Representative's vote on the updated rescue bill. December-dated gold fell to $839.80, down $4.50 on the session. The metal dipped as low as $833.70 in overnight trading.
Four days after rejecting of a similar measure sparked one of the biggest Wall Street sell offs ever, the House is expected to vote on a massive financial relief bill on Friday designed to unfreeze credit markets and restore stability to financial institutions.
Meanwhile, a Department of Labor report showed that non-farm payroll employment fell by 159,000 jobs in September compared to a revised decrease of 73,000 jobs in August. Economists had expected employment to fall by about 100,000 jobs compared to the decrease of 84,000 jobs originally reported for the previous month.
The U.S. dollar ticked higher against the euro and extended a yearly high amid ongoing fears the global credit problems may eventually lead to European Central Bank rate cuts. The greenback also strengthened against the sterling and yen, pushing gold's hedge appeal lower.
Crude oil prices also inched lower in early trading on Friday, adding to its recent slump. November oil fell to as low as $92.81 a barrel in overnight moves, a two-week intraday low.
The price of gold dropped sharply on Thursday in early U.S. trading and moved to its lowest level in nearly two weeks. Gold for November delivery moved to $844.30, down $43 on the session. The metal hit as low as $833.50 earlier in the day and tested its 20-day moving average.
The price of gold plunged by $43 Thursday's session, amid the dollar's sharp rise against the euro. The metal has given back its gains from earlier in the week when it soared as high as $915.30 after the House failed to get the necessary 218 votes to pass a $700 billion rescue plan.