* Frantic sell orders in strong volume seen after jobs data
* Dollar gains as expectations grow on December Fed taper
* Sharp gains in U.S. equities and dollar rise pressure gold
* Coming up: U.S. bond market, gov't closed for Veterans Day
(Updates market activity) NEW YORK/LONDON, Nov 8 (Reuters) - Gold dropped 1.7 percent on Friday, notching its biggest one-day fall in more than a month, as surprisingly strong U.S. jobs data raised the prospect that the Federal Reserve may soon decide to temper its bond-buying stimulus. A flurry of sell orders in heavy volume sent U.S. gold futures over $10 lower just minutes after the October nonfarm payrolls data, setting a weaker tone for the rest of the day. A similar move in gold futures was also seen after Thursday's strong GDP report. ( For a graphic, click here: http://link.reuters.com/pys54v ) Rallying U.S. equities and a soaring U.S. dollar sent gold to a three-week low, as bullion underperformed silver and platinum group metals. The S&P 500 index rose 1 percent on better economic hopes, while the dollar index was up 0.5 percent. U.S. job growth unexpectedly accelerated in October, with employers adding 204,000 jobs, while 60,000 more jobs were created in September and August than previously reported, the Labor Department said. "Those payroll numbers made the folks who buy gold nervous as they did not go in the direction they wanted to see, suggesting that tapering could be back on the table," said Axel Merk, chief investment officer at California-based Merk Funds, which have $450 million assets under management. Spot gold was down 1.7 percent at $1,285.06 an ounce week, its second consecutive weekly loss. U.S. Comex gold futures for December settled down $23.90 at $1,284.60 an ounce, with trading volume about 5 percent above its 250-day average, preliminary Reuters data showed. Gold has lost about a fifth of its value this year due to fears the Fed would begin cutting back its $85 billion monthly bond purchases. The metal's inflation-hedge appeal has been burnished by the bond purchases and low interest rates. "At the moment, the market is looking at underlying growth and can see how the U.S. is accelerating and that very simply leads to tapering one way or another, which is obviously not bullish for gold," BofA Merrill Lynch analyst Michael Widmer said. The metal had managed a rebound in recent weeks after a prolonged budget battle in Washington in October led investors to believe the Fed may not start withdrawing support for the economy and possibly push the tapering into next year. However, after Friday's strong jobs report, some economists said it would be unwise to rule out chances the Fed could curtail its bond-buying as soon as its next meeting in December. Among other precious metals, silver was down 1 percent at $21.43 an ounce. Platinum fell 0.6 percent to $1,439.49 an ounce, while palladium dropped 0.4 percent to $755.47 an ounce.
3:20 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold DEC 1284.60 -23.90 -1.8 1280.50 1313.40 171,702 US Silver DEC 21.317 -0.340 -1.6 21.250 21.905 48,987 US Plat JAN 1442.90 -13.90 -1.0 1437.50 1461.00 10,999 US Pall DEC 757.90 -1.25 -0.2 753.50 764.25 4,285 Gold 1285.06 -22.49 -1.7 1281.75 1312.66 Silver 21.430 -0.210 -1.0 21.280 21.800 Platinum 1439.49 -9.26 -0.6 1441.75 1458.50 Palladium 755.47 -3.25 -0.4 755.77 762.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 250D AVG CURRENT CHG US Gold 195,515 189,283 23.18 -1.01 US Silver 59,021 58,610 35.14 1.70 US Platinum 11,288 12,978 20.36 0.00 US Palladium 4,937 5,806
(Editing by William Hardy, John Stonestreet, Nick Zieminski and James Dalgleish)