By Claudia Assis , MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold futures rose more than 1% on Thursday, departing from this week's sideways trading as investors grew more concerned about the state of the U.S. economy.
Gold for August delivery, the most active contract, added $14.40, or 1.2%, to $1,245 an ounce on the Comex division of the New York Mercantile Exchange.
More people than economists expected filed for unemployment in the week ended June 12. The Labor Department's weekly report showed an increase of 12,000 initial jobless claims, whereas analysts expected roughly half of that increase.
Consumer prices fell 0.2% in May and inflation rose slightly, pointing to a continuation of record low short-term interest rates. Some analysts believe the low rates are part of what's fueling gold's run as more investors have turned to the metal in search of profitability.
Other metals tracked gold higher, with silver for July delivery adding 40 cents, or 2.2%, to $18.84 an ounce. Palladium for September delivery advanced $8.25, or 1.7%, to $483.45 an ounce.
Bullion and most metals have traded in narrow bands this week as investors wavered between showing more confidence about the economy and thus selling their gold positions and worrying about a potential debt crisis in Europe and a pause for the global economic recovery.
In a reflection of that, SPDR Gold Trust (GLD 121.94, +1.61, +1.34%) , the largest exchange-traded fund backed by gold, has recorded no fresh inflows in the past five business days as its holdings remain at a record 1,306.14 metric tons (1,439.77 short tons).
A weaker dollar was also providing some support for commodities on Thursday. The dollar index (DXY 85.63, -0.46, -0.53%) , which compares the U.S. unit to six currencies, was 0.5% lower at 85.61.
