The price of gold bullion rose 0.7% ahead of a much-anticipated US jobs report Friday.
Gold then rose further again – breaking $689 per ounce for the first time in 10 sessions – after the Labor Department said non-farm employers added only 88,000 staff last month.
That was more than one-tenth below Wall Street forecasts, pushing the US unemployment rate up to 4.5% from 4.4% in March.
Bond, equity and currency traders all took the news to signal a cut in US interest rates soon. Treasury yields dipped along with the Dollar.
Stock markets in both Europe and the US rose further on the thought of yet-cheaper money ahead.
Gold priced in Pounds Sterling broke above £346 per ounce for the first time in two weeks.
For European investors, gold bullion in Euros rose 0.8% to €507 per ounce.
"Unemployment has to go up further – closer to 5% – before the Fed can cut rates," said one US fixed-income manager to Bloomberg.
"That's a piece we're missing for people to agree the Fed is easing."
But Friday's US jobs report also showed hourly earnings rising only 0.2% against 0.3% expected. Manufacturing firms cut 19,000 jobs – the tenth monthly decline running.
Construction firms cut 11,000 jobs. Retail jobs fell by 26,100. (Could lower Fed rates stem the downturn in housing...?)
"The non-farms were below consensus, that is why gold has come back up because it could mean lower US interest rates earlier than previously thought," said Michael Widmer, analyst at Calyon.
"Next week will be important for the gold market."
On Monday China and Japan will re-open after the Golden Week holidays. Gold traders in Tokyo will find the metal nearly 2.5% higher versus the Japanese Yen.
Then on Wednesday, the US Federal Reserve meets to decide Dollar interest rates.
(Read more about the Fed's impact on world gold prices – here...)
In the gold mining sector, meantime, output from Peru remained closed by a strike.
AngloGold Ashanti, the world's third biggest gold mining company, reported first quarter production down 1% from last year and 10% lower from December.
This declining production came despite a 25% rise in capital expenditure. Cash costs per ounce rose 7.4%
"I hope [costs] would not get worse than this," said Ian Cockerill, head of Gold Fields – the world's fourth-largest gold miner – on Thursday.
"But I definitely do not see a short-term relief."
A fresh flood of cheap money from the Federal Reserve could also hurt gold mining production.