Gold prices hit a near-one-month high of $1548 per ounce in Asian trading Monday - a 1.8% gain on last week's low - before dropping back when London opened, while stocks and commodities continued to fall after Friday's disappointing US jobs data.
Silver prices traded in a 1% range around $36.74 per ounce.
"Speculations of a generous third quantitative easing (QE3) package will grow" if the negative tone of US economic news continues, reckons Swiss precious metals firm MKS.
"Expectations in the market suggest that gold prices will benefit in the short term by the belief that slowing growth in the US will prompt the Federal Reserve to maintain favorable monetary conditions."
The US economy added just 54,000 jobs in May, according to non-farm payroll data published Friday by the Bureau of Labor statistics, compared to analysts' forecasts that ranged from 150,000 to 190,000.
"This is gold-friendly data," says Credit Agricole analyst Robin Bhar.
"In the worst case scenario, we could have a double-dip in the US economy and possibly deflation, which would also help gold."
The US economy "is not able to stand on its own two feet...without fiscal and monetary stimulus and heavy government support," Hans Goetti, chief investment officer Asia at Finaport Investment Intelligence, told Bloomberg Television on Monday.
The likelihood of QE3 "is growing" reckons Cliff Waldman, economist at the Manufacturers Alliance/MAPI.
"Looking at all the data [the Fed is] going to determine we need all the help we can get."
"We don't see a QE3," countered Bill Gross, head of PIMCO, the world's largest bond fund, in a radio interview on Friday. "There has been too much discussion and dissent within the Fed to permit that type of program again...
"[But] What we do see is [the Fed] will simply speak to a Fed funds rate that persists for an extended period of time that in effect caps interest rates in the process."
Gross added that if the Fed funds rate were to remain at 0.25% for three or four years, then "that allows the three or the four year Treasury to sink close to 25 basis points, and that does effectively the same job as quantitative easing."
Over in Europe meantime, euro gold prices rose to EUR34,035 per kilogram (EUR1058 per ounce) Monday morning - a 0.5% gain on Friday's close, but still 1.3% down on where they started last week.
The Euro meantime touched a one-month high of $1.46 against the US Dollar - a 2.3% gain since last Wednesday - before slipping back.
"The turning point was Greece, and we can suggest Greece is out of the way for the short term," reckons Kurt Magnus, Sydney-based executive director of currency sales at Nomura Holdings, referring to news that the EU and the International Monetary Fund have officially agreed to pay the next installment of last year's EUR110 billion bailout.
German newspaper Der Spiegel reported Monday that a new aid package for Greece, currently under discussion, could exceed EUR100 billion. The Greek press on Friday reported a figure of EUR85 billion, while the rumored figure last Tuesday was EUR60 billion.
On the gold futures and options market, meantime, the net bullish position among non-industry, so-called speculative traders rose 5% in the week ending 31 May.
"While the jump in speculative length seems big, the market for gold still does not look overextended," says Walter de Wet, commodity strategist at Standard Bank in London, noting that, as a percentage of open interest, the two-year average position of net speculative longs is well within its range over the period.
Pointing to US economic data, "lower demand and slower growth favors accommodative monetary policy," Standard Bank noted late last week.
"This benefits gold."
Ben Traynor is editor of Gold News, the analysis and investment research site of gold ownership service BullionVault. He was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.