What: A much weaker than expected jobs report sent gold soaring Friday, with the precious metal up by more than $29 an ounce, or about 2.4%, as of about noon ET. That drove an even stronger rally in gold stocks, with Barrick Gold (NYSE:GOLD), B2Gold (NYSEMKT:BTG), Kinross Gold (NYSE:KGC), IAMGOLD (NYSE:IAG), and AngloGold Ashanti (NYSE:AU) all up by percentages in the 10% to 12% range just after noon.

So what: According to Federal Government data released on Friday morning, the economy created just 38,000 new jobs in May. That was well below the 155,000 gain predicted by economists and represented the slowest job creation rate in five years. In addition to that, the government also marked down the number of jobs created in April from 160,000 to 123,000, and reducing its figure for March's gain from 208,000 to 186,000. Further, 458,000 people left the workforce last month, a sign that it's getting harder to find a job.

This disappointing employment report was taken by the market as a sign that the economy isn't doing as well as had been thought, which in turn raised more doubts about whether the Federal Reserve will raise interest rates this summer. That's a positive for the price of gold, because higher interest rates increase the opportunity cost of holding a non-yielding asset such as gold.

Meanwhile, higher gold prices are an obvious positive for gold producers because it increases their earnings power. Barrick Gold, for example, needs gold to average $1,000 an ounce in 2016 to be cash flow breakeven. With gold recently trading above $1,240 an ounce, the company has the potential to produce significant free cash flow. It's a similar story for other producers like B2Gold, Kinross Gold, IAMGOLD, and AngloGold Ashanti, which can all thrive at higher gold prices, given that they have focused on getting their breakeven prices down after years of weaker gold prices.

Now what: The gold market is interpreting this week's poor jobs report as a sign that a rate hike is off the table, at least for the time being. That said, the Federal Reserve has made it pretty clear that it sees rates rising in the near-term, so it will be interesting to see if this data point really causes the Fed to pause. If it does, that's certainly bullish for gold stocks, which would likely continue to rally along with the price of gold.