Updated from 10:35 a.m. ET with settlement prices

NEW YORK (

TheStreet

) --

Gold prices

tumbled on Friday after a strong June jobs report blemished the yellow metal's appeal as a safe-haven asset.

Gold for August delivery at the COMEX division of the New York Mercantile Exchange plummeted $39.20 to $1,212.70 an ounce. The

gold price

traded as high as $1,257.10 and as low as $1,206.90 an ounce, while the spot price was off $37.60.

"Good news for the economy is bad news for gold as interest rates jumped on the payroll news and bond yields jumped higher; all this makes strong stocks, strong dollar and weak metals," George Gero, precious metals strategist at RBC Capital Markets, wrote in a note.

The Bureau of Labor Statistics reported nonfarm payrolls rose by 195,000 in June, as the unemployment rate remained unchanged at 7.6%. Economists polled by

Thomson Reuters

anticipated non-farm payrolls to have added 165,000 jobs.

Silver prices

for September delivery slid 96 cents to settle at $18.74 an ounce, while the

U.S. dollar index

was boosting 0.74%.

Gold has been trapped in bear territory since mid-April, when the price of an ounce plummeted about $200, or 13%, over two consecutive trading days. It was the largest two-day drop in 30 years for the precious metal.

Pillaging the value of the asset has been

Federal Reserve

language that the central bank may begin to taper its $85 billion a month in purchases of mortgage-backed securities and longer-term Treasuries, and improving economic data in housing, labor and consumer confidence, among others.

A spike in bond yields following the strong jobs report on Friday suggested the market anticipates the Fed will begin to scale back its monetary policy sooner than expected.

"This again suggests that Fed tapering is going to happen; I think that the estimate

to taper was for October,

but it looks like it may even happen in September now," said Gene Goldman, director of research at Cetera Financial.

Possibly providing some support to falling prices is Thursday's unprecedented move by the European Central Bank President Mario Draghi to provide forward guidance. The ECB said it doesn't plan to raise interest rates and that it expects key rates to remain the same or at lower levels for an extended period of time.

Investors should understand that this means the European Central Bank will continue its policy of monetary stimulus, despite the Fed's possible transition to scale back its efforts.

Gold mining stocks were mostly lower on Friday. Shares of

AngloGold Ashanti

(AU) - Get Report

were dropping 8.8% and shares of

Kinross Gold

(KGC) - Get Report

were dipping 8.5%.

Among volume leaders,

Barrick Gold

(ABX)

was off 7.8%.

Gold ETF

SPDR Gold Trust

(GLD) - Get Report

was down 2.8%, while

iShares Gold Trust

(IAU) - Get Report

also was sliding 2.9%.

-- Written by Joe Deaux in New York.

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