Investing.com - Gold futures fell further below the $1,200-level during European morning trade on Monday, as upbeat U.S. employment data underlined optimism over the strength of the economy and fuelled expectations that the Federal Reserve will begin to raise rates sooner than previously thought.
On the Comex division of the New York Mercantile Exchange, gold for December delivery fell as much as $9.60, or 0.8%, to a session low of $1,183.30 a troy ounce, a level not seen since December 31.
Prices recovered to last trade at $1,191.80 during European morning hours, down $1.10, or 0.09%, from a closing price of $1,192.90 on Friday.
Futures were likely to find support at $1,182.00, the low from December 31 and resistance at $1,215.70, the high from October 3.
Also on the Comex, silver for December delivery tacked on 5.4 cents, or 0.32%, to trade at $16.88 a troy ounce. Prices fell to $16.64 on Friday, the lowest since March 2010.
The U.S. economy added 248,000 jobs in September, the Labor Department reported Friday, well ahead of forecast for jobs growth of 215,000. The unemployment rate ticked down to 5.9%, the lowest level since July 2008.
The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, traded at 86.65, not far from Friday's four-year high of 86.87.
A stronger dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere in metals trading, copper for December delivery inched up 1.3 cents, or 0.43%, to trade at $3.012 a pound. Prices hit a six-month low of $2.985 on October 2.
Comex copper prices lost 3.9 cents, or 1.28%, last week, amid speculation weakening economic growth in China will reduce demand for the industrial metal.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.