For the week, gold was up almost 2 percent for its largest weekly gain in five weeks, boosted by safe-haven demand.
New York/London: Gold rose on Friday after data showed U.S. job creation slowed sharply over the past two months, fueling speculation that slowing economic momentum will force the Federal Reserve to keep its current stimulus.
For the week, gold was up almost 2 percent for its largest weekly gain in five weeks, boosted by safe-haven demand driven by tumbling currencies and assets in emerging markets.
Bullion, however, failed to hold on to highs hit earlier Friday after U.S. nonfarm payrolls rose only 113,000 last month after a meager 75,000 gain in December.
The metal`s rise was limited by an over 1 percent rally in the S&P 500 equities index as expectations of further economic strength more than offset the weak reading on the labor market, which was blamed partly on the weather.
"The payroll numbers are certainly weak, and I don`t think the Fed can afford to change its current monetary stimulus policy," said Frank McGhee, head precious metals dealer at Chicago commodities brokerage Alliance Financial LLC.
"Gold`s gains are hanging on hopes that the Fed will back off from tapering, but it is still vulnerable to a sell-off in the near term," McGhee said.
Spot gold rose as much as 1.2 percent to USD 1,271.70 an ounce, near its two-month high, after the job data.
It was up 0.8 percent at USD 1,266.75 an ounce by 3:19 p.m. EST (2019 GMT)
U.S. COMEX gold futures for April delivery settled up USD 5.70 at USD 1,262.90 an ounce, with trading volume about 20 percent finish below its 250-day average, preliminary Reuters data showed.
Last week, the Fed decided to trim its bond purchases by another USD 10 billion as it stuck to a plan to wind down its extraordinary economic stimulus despite recent turmoil in emerging markets.
VTB Capital analyst Andrey Kryuchenkov said the Fed is not going to change its forward guidance due to a lack of inflation pressures.
"However, from an investor point of view, this still suggests a strong dollar going forward," he said.
The dollar index fell 0.3 percent, underpinning gold`s gains.
Gold prices have risen around 5 percent since the beginning of the year, though investors continue to regard recent mixed U.S. economic data and emerging-market turmoil as insufficient to derail the global recovery.
Silver, tracking gold, was up nearly 5 percent this week - its biggest weekly gain since mid-August. It was last up 0.5 percent on the day at USD 20 an ounce.
Platinum group metals also posted small gains for the week on supply worries due to a possible strike in South Africa. However, latest news about government-brokered talks between mine union AMCU and the world`s three biggest platinum producers to end a two-week wage strike limited further gains.
Platinum was trading up 0.5 percent at USD 1,378.50 an ounce, while palladium rose 0.1 percent to USD 708.42 an ounce.