NEW YORK/LONDON: Gold rose 1 percent on Thursday as the dollar fell sharply against the yen and the euro on fears of disappointing US jobs data the next day.
After trading mostly flat, gold suddenly turned higher at midday in New York as investors sold long positions on the greenback - or bets that the US currency will rise - ahead of Friday's all-important US nonfarm payrolls numbers.
Gold has been under pressure recently on a resurgent dollar driven by expectations that upbeat data would prompt the US Federal Reserve to taper its $85-billion-per-month bond-buying program.
Worries over an overbought US equities market also prompted investors to buy more gold, analysts said.
"We are starting to see investors being nervous about holding equities at these levels going forward, so you are going to see money flow back into the safe-haven markets," said Tom Power, senior commodities trader at futures brokerage R.J. O'Brien.
Spot gold climbed 0.8 percent to $1,414.35 an ounce by 2:38 p.m. EDT (1838 GMT), off a three-week high at $1,423.16 set earlier in the session.
US Comex gold futures for August delivery settled up $17.30 at $1,415.80 an ounce, with trading volume about 25 percent below its 30-day average, preliminary Reuters data showed.
The number of Americans filing new claims for unemployment benefits fell last week, pointing to moderate job growth despite slowing economic activity.
US economic data has been in the spotlight since Fed Chairman Ben Bernanke said last month the central bank would taper off monetary stimulus if the US housing and job markets showed continued strengthening.
Economists forecast US job growth probably picked up only slightly in May, suggesting the economy is still in a rut and not ready for the Fed to dial back monetary support.
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