Gold rises as economy renews Fed

Gold rose on Friday as investors selling crude oil and equities bought the metal after a weak US nonfarm payroll report boosted bullion\'s investment appeal. Talk that a weaker economy might prompt further monetary easing by the Federal Reserve. Bullion still finished down 0.6 per cent for the week. Gold has dropped $150 (Dh550.50) from a peak in late February after a strong run of US data cast serious doubts over whether the Federal Reserve would launch a third round of government bond purchases, or quantitative easing, also known as QE3. Fed Chairman Ben Bernanke \"had said QE3 is going to be dependent on the incoming data. Next time when he speaks he\'s going to re-emphasise that the Fed is willing to do more,\" said Axel Merk, chief investment officer of Merk Funds with about $650 million in assets. \"That\'s one of key reason why gold is up because we have had a very long period of consolidation,\" he said. Gold rebounded from an early decline after the Labour Department reported that US employers added 115,000 workers to payrolls last month, the third straight month in which hiring had slowed. The far weaker-than-expected jobs data knocked crude oil prices down 4 per cent and hit the Dow Jones average with triple-digit losses. Spot gold was up 0.4 per cent at $1,643.20. Having traded $20 lower earlier in the session, the metal slowly chipped away losses on intensifying speculation of QE3, which has been a major driver behind gold\'s 5 per cent rise this year. US gold futures for June delivery settled up $10.40 an ounce at $1,645.20, with trading volume about 10 per cent below their 30-day average, preliminary Reuters data showed. US gold futures investors continued to digest news the CME Group was granted a 90-day reprieve from imposing new rules that will hike margins for some exchange members by as much as a third.