Gold futures edged higher on Friday, as the dollar slipped after new data reported the biggest unemployment rate climb in five years, raising concerns that the U.S. economy may already be in a recession.
Gold for June delivery edged $3.60 higher to close at $913.20 an ounce on the Comex division on the New York Mercantile Exchange. The metal is down 12 percent from the record $1,033.90.
For the week, however, the precious metal posted a loss of $23.30 from last Friday's closing level of $936.50 an ounce.
Traders are weighing the odds of an end-of-April Fed rate cut against the demand contraction implications of a U.S. economy with its reverse thrusters engaged, said Jon Nadler, senior analyst at Kitco Bullion Dealers, in a research note.
For the moment, the tilt is toward the speculative buying that the emphasis on the former might give bullion players, Nadler said.
The dollar dropped after a report showed the Labor Department said employers cut jobs in March for the third straight month, adding to the pessimistic view regarding the near-term U.S. economic outlook.
After the data was released, the dollar was very volatile, first sliding down with sharp sell-off's, then recovering only to tumble again. The dollar index, which tracks the performance of the greenback against other major currencies, was last down 0.1 percent to 72.09.
Out of the past six bear markets for the U.S, five of them have sent gold higher. Gold rose 31 percent in 2007 as the dollar dropped 9.5 percent against the euro.
Also on the Nymex, silver futures for May delivery gained 27.5 cents, or 1.6 percent, to $17.755 an ounce. The price has gained 19 percent this year.