Investing.com - Gold futures fell on Thursday after robust U.S. jobs data fueled demand for the dollar, which tends to trade inversely with the yellow metal.
Dovish comments out of the European Central Bank weakened the euro and sent investors chasing safe-haven greenback positions, which also compounded gold's losses.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,320.50 a troy ounce during U.S. trading, down 0.78%, up from a session low of $1,310.50 and off a high of $1,328.40.
The August contract settled up 0.32% at $1,330.90 on Wednesday.
Futures were likely to find support at $1,305.40 a troy ounce, the low from June 25, and resistance at $1,334.90, Tuesday's high.
The dollar firmed and sent gold falling after the U.S. Department of Labor reported that non-farm payrolls rose by 288,000 in June, easily surpassing expectations for an increase of 212,000. May's figure was revised up to a gain of 224,000 from 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May. Analysts had expected the jobless rate to hold steady at 6.3% last month.
A day earlier payroll processor ADP reported in its nonfarm payrolls report that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000.
The numbers kept expectations on track for the Federal Reserve to continue tapering stimulus programs this year and raise interest rates the next.
Fed stimulus programs such as monthly bond purchases aim to spur recovery by suppressing long-term interest rates, weakening the dollar as a side effect, thus bolstering gold's appeal as a hedge.
Also on Thursday, the Institute of Supply Management said its non-manufacturing purchasing managers' index fell to 56.0 in June from 56.3 in May. Analysts had expected the index to hold steady at 56.3 in June.
Meanwhile in Europe, ECB President Mario Draghi reiterated the bank’s forward guidance that rates will remain on hold at present or lower levels for an extended period.
He emphasized that "the governing council is also unanimous in its commitment to use unconventional instruments, if necessary, to address the risk of too-prolonged period of low inflation.”
The ECB left all rates on hold earlier Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
Draghi said unemployment rate in the euro zone is still too high and warned that risks to the economy remain to the downside.
His comments softened the euro against the dollar, often a recipe for falling gold prices.
The ECB president also announced that it will shift to a six-week meeting cycle from January 2015 and that it will start publishing meeting minutes.
Meanwhile, silver for September delivery was down 0.76% at $21.140 a troy ounce, while copper futures for September delivery were up 0.37% at $3.277 a pound.