A saleswoman arranges a gold necklace inside a jewelry showroom in Kochi, India.

Gold rose 1.6 percent to a two-week high on Friday, after a US non-farm payrolls report, seen as likely to pave the way for the Federal Reserve to raise interest rates this month, failed to aid the dollar’s ascent.

Spot gold, weaker initially, rose as much as 1.6 percent to its highest since Nov. 20 at $1,080.90 an ounce after the data and was up 1.5 percent at $1,078.86 an ounce by 1453 GMT. It was on track for a 1.9 percent gain for the week.

The dollar pared earlier gains, although remained up 0.5 percent against a basket of currencies, after the payrolls report and news that sources said OPEC countries had decided to increase their output ceiling.

“The dollar has moved a lot over the past 24 hours so that’s helped keep it here … and people are already expecting the Fed to move now that the next main reaction is only going to be when we actually have confirmation on Dec. 16,” ICBC Standard Bank analyst Thomas Kendall said.

On Thursday, gold rallied nearly 1 percent after monetary easing measures from the European Central Bank fell short of expectations, boosting the euro and sending the dollar to its lowest in a month.

But the metal had previously fallen to a near six-year low of $1,045.85 in reaction to a 12-1/2 year high in the dollar and prospects of a US rate rise this month.

“Shorts were squeezed … market got way too carried away and over positioned shorts,” a London trader said.

“There were two contradicting factors today: NFP, OPEC…oil to zero, gold to the moon,” the trader added.

Brent oil futures lost 2 percent to below $43 a barrel.

The main focus for the gold market now remains the Fed’s meeting on Dec. 15-16.

Silver rose 2.5 percent to $14.44 an ounce. Platinum gained 3 percent to $870.60 an ounce and palladium rose 2.9 percent to $550.40 an ounce.

A rate increase would be the first in nearly a decade.

Higher rates tend to weigh on non-interest-paying gold by increasing the opportunity cost of holding it.

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