* U.S. economy created a record 4.8 million jobs in June
* Fed edges toward longer-range plan for monetary policy
* Dollar touches one-week low
(Updates prices)
By Shreyansi Singh
July 2 (Reuters) - Gold reversed course and edged higher on Thursday as the dollar eased, though the metal traded below an eight-year peak hit in the last session as prospects for economic recovery improved after data showed the U.S. economy created record jobs in June.
Spot gold XAU= rose 0.4% to $1,777.04 per ounce by 1:42 p.m. EDT (1742 GMT), holding close to the near eight-year high of $1,788.96 hit on Wednesday. U.S. gold futures GCv1 settled up 0.6% at $1,790 per ounce.
Nonfarm payrolls rose by 4.8 million jobs in June, the Labor Department's closely watched monthly employment data showed, the most since the government began keeping records in 1939. the dollar should strengthen on these very strong numbers, but it hasn't, which means people are still concerned that the economy is not out of the woods yet," said Edward Meir, analyst at ED&F Man Capital Markets.
The dollar .DXY was little changed, having fallen to a one-week low against a basket of currencies earlier in the session. USD/
"You can't judge the economy on just one data point for one day ... People think the economy is coming back and that the Fed will not have to stimulate as much," said Michael Matousek, head trader at U.S. Global Investors.
However, the Fed's minutes released on Wednesday pointed to the fact that it will "keep rates low until 2022, so therefore that provides still a bid for gold," he added. Reserve policymakers are looking at reviving a Great Recession-era promise to keep interest rates low until certain conditions are met. bullion has risen 17% so far this year, prompted by stimulus measures and interest rate cuts by central banks. other metals, palladium XPD= was flat at $1,905.10 per ounce, platinum XPT= fell 0.7% to $810.10 per ounce, while silver XAG= edged up 0.2% to $17.97.