Gold tumbled Friday as employers shed far fewer jobs than expected last month, hurting demand for safe haven investments.
Most other commodities also fell following a gain in the dollar. The greenback rose as confidence in the economy grew and as investors wagered that the Federal Reserve is likely to boost interest rates from their record lows sooner than expected.
Analysts don't expect any increase until well into next year, but even the notion of rising rates helped shore up the dollar, which has been sliding for most of this year.
The shift in expectations came after the Labor Department said the economy lost 11,000 jobs last month, the fewest since the recession began in December 2007 and far fewer than the loss of 130,000 jobs economists projected.
A rising dollar not only made commodities more expensive for foreign buyers but also eased worries that low interest rates will unleash massive inflation. That hurt demand for gold, which investors buy as a way to protect themselves against drops in currencies and inflation.
The ICE Futures US dollar index, which measures the dollar against a basket of currencies, rose 1.4 percent.
Gold for February delivery tumbled $48.80 to $1,169.50 an ounce on the New York Mercantile Exchange from $1,218.30 an ounce Thursday. It is still up 32.3 percent for the year.
"We could take another $50 off gold and still be in a roaring bull market," said Jeffrey Friedman, senior market strategist at Lind-Waldock, a futures brokerage.
The rising dollar overshadowed enthusiasm that an improving economy could create more demand for raw materials.
March silver fell 60.8 cents to $18.520 an ounce from $19.128 an ounce. March copper settled down 0.75 cent at $3.2375, after hitting a 2009 high of $3.2750 during trading.
December platinum fell $44 to $1,448.70.
Most energy prices fell at the Nymex.
Light, sweet crude for January delivery fell 99 cents to settle at $75.47 a barrel, a seven-week low.
January heating oil dropped 2.27 cents to settle at $2.0268 per gallon. Gasoline lost 1.8 cents to settle at $1.975 a gallon, while natural gas gained 12.7 cents to settle at $4.586 per 1,000 cubic feet.
Like metals, most grain prices lost ground at the Chicago Board of Trade.
March wheat futures fell 13.5 cents to settle at $5.58 a bushel. Corn for March delivery slid 12.25 cents to $3.8850 a bushel. January soybeans fell 4 cents to $10.43 a bushel.
Cotton, coffee, cocoa, sugar and orange juice fell, while pork bellies rose.