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Tue Feb 24, 2009 4:01am GMT

By Nick Trevethan - Analysis

SINGAPORE (Reuters) - Gold is rapidly becoming the last haven in a sea of uncertainty as worries rise about the ability of not only commercial banks, but even governments, to repay debts.

With few signs that the world’s worst economic crisis since the 1930s is close to bottoming out, wrung-out investors will keep on pumping money into gold-backed securities as insurance against financial Armageddon.

But like most insurance policies, investors hope it won’t pay off.

“Gold is an investment you hope you never make money on. If you do, it means other markets have lost,” said Stephen White, director at Sydney-based treasury advisory firm Noah’s Rule.

He added: “Cash is king and gold is cash in any currency. In the short term, gold will continue to appreciate but once stability returns be ready for a quick fall, possibly similar

In the currency market, the dollar sank against the euro. Late Friday, the euro was trading at $1.2932 vs. $1.2861 on Thursday.

Yesterday came the grim jobs figures everyone was expecting. The Labor Department reported that non-farm payrolls fell by a seasonally adjusted 598,000 in January after a revised loss of 577,000 in December. That marked the largest payroll loss since December 1974.

At the same time, the unemployment rate soared to 7.6%, compared with 7.2% in December. That was even worse than already-pessimistic economists’ expectations for a rise to 7.5%, and is the highest unemployment rate since September 1992.

“These numbers are dreadful but does it matter?” asked Alan Ruskin of RBS Greenwich Capital. “No,” he wrote. “All the prior labor market indicators, notably the claims data, gave a feeling of foreboding before these numbers. The data broadly delivered.”

And Kathy Lien, director of currency research at GFT, pointed out “that traders

The U.S. economy shed 693,000 jobs in December, a showing that was far worse than economists had expected and that may even have been the biggest monthly loss of jobs in more than 30 years, analysts said of a closely watched survey of business employment released yesterday (Tuesday).

The monthly ADP Employer Services (ADP) survey - which tracks private non-farm payroll employment - stunned economists, showing a surprising increase from the 476,000 jobs lost in November.

The decline was the worst in the history of the survey, which began reporting in 2001. And if the findings are matched by the official government jobs report, due out Friday, it would be the biggest employment drop since the U.S. recession of 1975.

“This is an eye-poppingly bad number,” Art Hogan, the New York-based chief market analyst at Jefferies & Co. (JEF), told Bloomberg News. “The economy is in

U.S. payrolls data show steepest fall in 34 years… Dollar falls to 6-week low vs yen, but rises vs euro… Markets fully price another half-point rate cut

The dollar fell to a six-week low against the yen on Friday after government data showed the U.S. economy lost more than half a million jobs in November, the worst performance in 34 years.

The dollar, however, rose against the euro, as investors again sought shelter in the U.S. currency away from European currencies on darkening prospects for economies worldwide.

“The much weaker-than-expected November result alongside a sharp downward revision to October suggests the U.S. recession underway is going to be a long one,” said Stephen Malyon, chief currency strategist at Scotia Capital in Toronto.

“The U.S. dollar has weakened, indicating that fundamental gravity might finally be weighing on the currency,” he added.

In early New York trading, the