Gold futures on the COMEX division of the New York Mercantile Exchange sharply rose on Friday, as traders thought that a poor US jobs report may prompt the Federal Reserve to respond with new economic stimulus measures soon.
The most active gold contract for December delivery jumped $34.9, or 2.05 percent, to settle at $1,740.5 per ounce.
Gold closed at its highest point since late February, as trading sharply rose in response to Friday morning's US jobs report from the Department of Labor. For the week, gold closed 3.1 percent higher.
According to the Labor Department report, the United States added 96,000 jobs in August, much less than the market expectation of around 125,000. The Labor Department also revised down the employment numbers from the previous June and July reports.
Gold soared in response to the jobs report, as traders believed that the weak data would force the central bank to do more to stimulate the US economy. The Fed is scheduled to have its September policy meeting next week, and many investors expect it to announce another round of quantitative easing given the recent sluggishness of the economy.
Quantitative easing policies are a positive factor for gold, as the precious metal traditionally rises on fears of inflation.
Gold was further supported by gains in crude oil and a sharply lower US dollar, which weakened following the release of the US jobs report. A weaker greenback is also good for gold, as it makes commodities less expensive for holders of other currencies.
Silver for December delivery sharply rose $1.016, or 3. 11 percent, to close at $33.690 per ounce.
