Gold futures jumped the most in a week on speculation that the Federal Reserve will keep interest rates low to stimulate the U.S. economy, boosting the appeal of the precious metal as an alternative to the slumping dollar. The greenback headed for the third straight weekly decline against a basket of major currencies as this week’s economic reports showed the U.S. recovery is waning. Employers in May added the fewest number of workers in eight months, and unemployment climbed to 9.1 percent. Before the jobs figures were released today, gold dropped as much as 0.5 percent. “We’ve seen the data stream take a turn for the worst,” said Matt Zeman, a strategist at Kingsview Financial in Chicago. “Traders are not convinced there won’t be further measures taken to keep borrowing costs low. In an uncertain economic environment, gold is a good choice.” Gold futures for August delivery rose $12.20, or 0.8 percent, to $1,544.90 an ounce at 9:16 a.m. on the Comex in New York, heading for the biggest gain for a most-active contract since May 27. Last month, the price fell 1.3 percent after reaching a record $1,557.40 on May 2. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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