Embraer 145 Captain reported a traffic conflict while on final approach with an aircraft departing on the runway in visual conditions. The Captain was issued a clearance to go around and returned for a safe landing.

Narrative

While talking to approach control prior to tower handoff; ATC asked if we had Gulfstream traffic in sight; we did; he cleared us for the visual Runway XX #2 behind gulfstream. Once on with tower; tower said square base to final. We are #2; continue for Runway XX. Gulfstream landed; we were within a 2 mile final(estimate) ZZZ tower clears aircraft to line up and wait for Gulfstream to clear runway. I immediately advised my co-pilot he was pilot flying; to be prepared for a go around. As the aircraft rolls on to runway it interferes with our glide slope; our aircraft began to pitch down. We got a sink rate" and a "pull up" command. I advised my Co-Pilot to go around; at that same time ZZZ tower instructed us to go around because the aircraft was on the runway; he did not have take off clearance and there was not enough separation. We executed go around procedure efficiently and got vectored again for a successful landing on Runway XX in ZZZ.Cause: ATC poor traffic separation management. Suggestions: We should have squared the base to final. Even though in this case I still don't think we would have had enough separation between departing traffic."