Forex Pros  – Last week saw gold prices post their biggest weekly gain in 19 months, after weak employment data added to concerns over the U.S. economy and amid fears over sovereign debt contagion in the euro zone.  

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery settled at USD1,544.45 a troy ounce by close of trade on Friday, rallying 3.7% over the week, the most since early November 2009.

It earlier rose to USD1,545.85 a troy ounce, the highest price since June 23. Gold prices were approximately 2.2% away from an all-time high of USD1,577.15 an ounce it hit on May 2.

The U.S. Department of Labor said on Friday that nonfarm payrolls rose by a disappointing 18,000 in June, significantly below expectations for an increase of 89,000, as employers hired the fewest workers in nine months.

The previous month’s figure was revised down to a gain of 22,000 from a previously reported 54,000.

The unemployment rate rose to 9.2%, the highest level in six months.

Global financial service provider Commerzbank said that the “dismal job numbers added to speculation that the Federal Reserve will have to soon roll out a third round of quantitative easing.”

Meanwhile, a brief suspension in trading of Italian bank shares on Friday added to concerns that the region’s debt crisis could spill over to other peripheral euro zone member states, spurring a flight to safety.

The cost of insuring Italian debt against default rose sharply, while the cost of insuring Portuguese, Irish and Greek government debt against default surged to record highs.

Gold prices were boosted earlier in the week after the People’s Bank of China and the European Central Bank each raised key interest rates in an effort to tame inflation.

Rate hikes tend to dampen gold prices in the short term, but over the long run, gold still benefits from rising inflation as investors seek a hedge against accelerating consumer prices.

Elsewhere, silver for September delivery traded at a four-week high of USD36.72 a troy ounce by close of trade on Friday, surging 7.6% over the week, while copper for September delivery traded at USD4.405 a pound, climbing 2.3% on the week.

In the week ahead, euro zone finance ministers are to meet to discuss a bailout package for Greece, while the highly anticipated results of European banks’ stress tests are to be released on Friday.

Meanwhile, Fed Chairman Ben Bernanke will testify before Congress in his semi-annual report.