* U.S. initial jobless claims rise by more than expected
* Dollar weakens, stock markets turn lower
* Economic jitters support investment in bullion
(Updates prices, adds comment, background)
By Jan Harvey
LONDON, Aug 19 (Reuters) - Gold prices rose to a seven-week
high at $1,234.55 an ounce on Thursday after data showed new
U.S. claims for unemployment benefits unexpectedly hit a
nine-month high last week, pressuring the dollar.
Spot gold <XAU=> was bid at $1,233.30 an ounce at 1336 GMT,
against $1,227.55 late in New York on Wednesday. U.S. gold
futures for December delivery <GCZ0> rose $4.40 to $1,235.80.
As well as bringing currency benefits to gold, which usually
rises on a weak dollar, the data also fuelled interest in the
metal as a haven from economic uncertainty, analysts said.
"The latest economic data have disappointed, raising
concerns once again about the solidity of the recovery," said
Anne-Laure Tremblay, an analyst at BNP Paribas. "This
uncertainty in turn supports the gold price."
The dollar was down 0.14 percent against a basket of
currencies in the wake of the data, which showed initial state
jobless benefit claims rose to 500,000 in the latest week,
against expected claims of 476,000. [] []
Weakness in the U.S. unit lifts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
On the wider markets, European equities and U.S. stock
futures both turned negative after the numbers, which analysts
said added to a shaky picture of the U.S. economic recovery.
Wall Street stocks later fell at the market open. [] []
Concerns over the prospect of sluggish growth have raised
investors' appetite for bullion as a haven from uncertainty in
the wider markets. This has been reflected in a rise in holdings
of the world's largest gold exchange-traded fund.
ETF HOLDINGS RISE
New York's SPDR Gold Trust <GLD> said its holdings rose just
under 1 tonne to 1,295.516 tonnes, their highest since July 27,
on Wednesday. []
ETF Securities, a London-based provider of exchange-traded
products backed by precious metals, meanwhile said in a weekly
report on Thursday that inflows into its physically backed gold
products had hit a 13-week high.
"This greater level of investor interest shows that
investors currently prefer more defensive positions again," said
Commerzbank in a note.
"Confidence in the recovery of the global economy is
evidently falling. As long as investor interest remains high,
gold prices should remain well supported."
The technical outlook for gold is also looking more positive
after the metal's recent gains, analysts said, although strong
pockets of resistance remain.
"Having broken through daily cloud resistance earlier in the
week, a retracement level at $1,242 could be tough to break in
the near term," said Barclays Capital in a note.
"Nevertheless, consolidation above $1,190 is bullish,
and we continue to expect the cited resistance eventually to
give way and gold to test $1,350 later in the year."
Among other precious metals, silver <XAG=> was bid at $18.49
an ounce against $18.32, platinum <XPT=> was at $1,534 an ounce
versus $1,527 and palladium <XPD=> at $493.50 versus $486.50.
The ratio of platinum to gold -- or how many ounces of gold
were needed to buy an ounce of platinum -- fell to a 1-1/2 month
low at 1.24 on Thursday, as the yellow metal's rise made it
comparatively more expensive.
(Reporting by Jan Harvey; Editing by Jane Baird)
