(Bloomberg) -- Gold rose the most in a month after a US jobs report painted a mixed picture of the labor market, further clouding the outlook for Federal Reserve rate hikes.

US nonfarm payrolls increased 261,000 last month, far above the median economist estimate. Meanwhile the unemployment rate rose more than expected, based on a separate survey. The dollar fell the most since in two years, boosting gold and other commodities priced in the currency.

“This will do little to change the Fed’s mind about the labor market and the threat to inflation,” said Nicky Shiels, head of metals strategy at MKS PAMP SA. “But gold and silver just aren’t responding to the ‘good news is bad news’ hawkish Fed narrative.”

The conflicting report doesn’t provide a clear indication that the labor market is cooling, which would allow the Fed to slow its rate hikes. Gold has slumped this year due to the Fed’s relentless monetary tightening, which diminishes the appeal of non-yielding assets like bullion.

Chair Jerome Powell signaled less aggressive tightening could be appropriate going forward, after hiking rates 75 basis points at this week’s meeting. Still monetary policy will probably have to be more restrictive than previously anticipated to cool high inflation, he said on Wednesday.

“With support firmly established at $1,615, the first key upside challenge awaits in the $1,675-80 area where we find a recent high, the 50-day moving and trendline from the March high,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S.

Gold futures for December delivery rose as much as 3.4% and settled 2.8% higher at $1,676.60 an ounce in New York, capping a weekly gain of 1.9%. The Bloomberg Dollar Spot Index fell 1.7%. Silver, platinum and palladium all rose.

--With assistance from Diego Lasarte.

©2022 Bloomberg L.P.