Spot gold was up 1.2% at $1,830.71 per ounce by 1:33 p.m. EDT (1733 GMT), after hitting its highest since mid-June at $1,833.80, on track to a fourth straight weekly gain.
U.S. gold futures settled 1.2% higher at $1,833.7.
U.S. job growth came in well below expectations in August amid a jump in COVID-19 infections.
The dollar index slipped soon after the report, bolstering gold's appeal for those holding other currencies. [USD/]
"Gold received a welcome boost from a much weaker (jobs) report," said Saxo Bank analyst Ole Hansen.
"But the fact that gold has failed to break above resistance at $1,835 could indicate some scepticism about whether this means peak growth and delayed taper."
Fed Chair Jerome Powell said last week that if job growth continued, the Fed could start cutting asset purchases this year, but would remain cautious about raising interest rates.
"The knee jerk reaction was positive for gold as a big miss with the headline number pretty much ruled out a September taper," said Ed Moya, senior market analyst at foreign exchange brokerage OANDA, putting it on course for a break toward $1,850.
Some investors view gold as a hedge against higher inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion.
"Market focus will shift to the September FOMC meeting next. We continue to see further upside risk for gold in light of our expectations for the USD to weaken and real yields to remain deeply negative," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
Silver jumped 3.4% to $24.70 per ounce, while platinum was 2.6% higher at $1,024.41. Palladium rose 1.1% to $2,425.70.
(Reporting by Arpan Varghese and Arundhati Sarkar in Bengaluru; Editing by Emelia Sithole-Matarise and Vinay Dwivedi)
By Arpan Varghese