Gold jumped the most since August as signs of weakening job growth in the U.S. fueled expectations that the Federal Reserve will take further steps to spur growth, boosting the appeal of the metal as an inflation hedge.

Payrolls climbed by 69,000 last month, less than the most-pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department figures showed  in Washington. To rekindle the economy, the Fed purchased $2.3 trillion of debt in two rounds of so-called quantitative easing from December 2008 to June 2011, helping to send gold to a record $1.923.70 an ounce in New York in September.

The metal, which climbed for 11 consecutive years, erased its gains last month as the deepening crisis in Europe prompted investors to buy the dollar as a haven rather than gold. Earlier this year, bullion slipped into a bear market by dropping as much as 21 percent from its peak last year as government reports signaled an improving U.S. economy and reduced the chances of further stimulus from the Fed.

“The murmurs about easing are getting louder after today’s data,” Ronald Stoeferle, a commodity analyst at Erste Group Bank AG in Vienna, said in a telephone interview. “Any form of easing is good as people will rush to buy gold to hedge against inflation.”

Gold futures for August delivery jumped 3.7 percent to settle at $1,622.10 an ounce at 1:54 p.m. on the Comex in New York, the biggest advance for a most-active contract since Aug. 8. Before the Labor Department report, prices slumped as much as 1.2 percent.

The metal dropped 6 percent in May, the fourth straight decline and the longest losing run since 2000 as the dollar climbed 5.4 percent against a basket of six currencies last month. The rally helped gold erase losses for the year and rise 3.5 percent.

Alternative Investment

“The safe-haven story is back as people realize that they need an alternative investment to the dollar and treasuries as that space is getting very crowded,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview.

Silver futures for July delivery surged 2.7 percent to $28.512 an ounce on the Comex, the biggest gain in two weeks. Prices climbed 0.4 percent this week, rising for the first time in six.

On the New York Mercantile Exchange, platinum futures for July delivery advanced 1.1 percent to $1,433.20 an ounce, helping the metal climb 0.5 percent this week. Palladium futures for September delivery rose 10 cents to $614.