Gold hits 7-week high at 1,235 after US data

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 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 US unit lifts gold8217;s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.On the wider markets,European equities and US stock futures both turned negative after the numbers,which analysts said added to a shaky picture of the US economic recovery. Wall Street stocks later fell at the market open.

Concerns over the prospect of sluggish growth have raised investors8217; appetite for bullion as a haven from uncertainty in the wider markets. This has been reflected in a rise in holdings of the world8217;s largest gold exchange-traded fund. New York8217;s SPDR Gold Trust said its holdings rose just under 1 tonne to 1,295.516 tonnes,their highest since July 27,on Wednesday.