NEW YORK ( TheStreet) -- Gold prices were plummeting on Thursday after a strong labor report compounded with a large selling order of gold that triggered a negative reaction among traders. Gold for December delivery at the COMEX division of the New York Mercantile Exchange was falling $32.20 to $1,331.60 an ounce. The gold price traded as high as $1,366.20 and as low as $1,325.60 an ounce, while the spot price was diving $34.73. The Labor Department reported Thursday that jobless claims for the week ending Sept. 7 dropped to 292,000, which was a decrease from the prior week's figure of 323,000. Economists surveyed by Thomson Reuters were expecting claims to rise to 330,000. Investors should note, however, that two states did not file jobless claims in the latest data, which could mean claims actually were higher than reported. The initial selloff occurred around 3 a.m. New York time during electronic trading when a large sell order in the market triggered computer-powered high frequency trading. That is, a market participant sold a large order of gold at a price below $1,350 an ounce -- a key technical level -- that prompted a surge of automatic trading. This automatic trade typically occurs when a trader or firm becomes concerned that price support for the commodity will rapidly erode, making the asset less valuable. To avoid losing too much value, the trader or firm commands a computer to sell the asset as soon as it reaches a certain level. "The whole concoction of events has sort of pushed us down to these levels," said Jim Steel, chief commodities analyst at HSBC Bank USA. The Federal Reserve has said the decision to taper its economic stimulus program would be heavily influenced by the strength of labor market data, and the improved numbers that came from the Labor Department on Thursday suggested that tapering is likely. Gold prices react negatively to "taper talk" as many traders view gold as a hedge against monetary stimulus, which could be inflationary. "I think that anybody who is rooting for taper-zero or taper light, I believe the Federal Reserve is going to do the full taper, which is consensus $20 billion tapering down to $65 billion," said Doug Cote, chief market strategist at ING Investment Management U.S.