Gold spikes 2%

New York/ London: Gold shot up 2 per cent on Friday for the second time in two weeks, hitting six-month highs as a tepid US jobs report strengthened expectations of further monetary easing by the Federal Reserve.

Extending a month-long rally, spot gold bolted up by $30 an ounce just after the US Labour Department reported that nonfarm payrolls rose 96,000 last month, well short of expectations for a 125,000 rise.

The numbers stoked expectations that Fed policy makers will agree at next week’s meeting to launch a third round of government bond buying, or quantitative easing, also known as QE3, to stimulate the world’s largest economy.

“Gold is going through the roof because this negative data makes QE3 more likely now,” said Daniel Briesemann, commodities analyst at Commerzbank in Frankfurt.

Spot gold ended the day up 2.06 per cent at $1,736 per ounce, having touched its highest level since February. Copper also rallied while the dollar dived more than 1 per cent.

US futures settled up 2.05 per cent at $1,740.5 an ounce after hitting $1,745.4, also the highest since February.