Gold rises on global growth fears; firm dollar caps gains

• Spot gold was up 0.5% at $1,694.66 per ounce by 1200 GMT. US gold futures rose 0.6% to $1,698.70.

Gold prices gained on Thursday after a batch of sombre economic data heightened fears over global growth, while a stronger dollar and the easing of coronavirus-driven lockdowns by many countries limited the upside.

Spot gold was up 0.5% at $1,694.66 per ounce by 1200 GMT. US gold futures rose 0.6% to $1,698.70.

Julius Baer analyst Carsten Menke said prices had hovered around $1,700 for a while.

He said there was "a bit of a tussle" as some anticipate another deterioration of the economic backdrop and enter the market while another camp, which anticipates a gradual recovery as lockdowns ease, is considering not adding more gold to portfolios.

The new coronavirus has infected more than 3.71 million people globally, battered global growth and prompted investors to seek safe havens such as gold. It has risen more than 10% so far this year.

More dismal data from the United States highlighted the deep economic impact of the virus, with US private employers laying off a record 20.2 million workers in April.

The focus now shifts to US weekly initial jobless claims data due later on Thursday.

Also on investors' radar are developments surrounding US-China relations after President Donald Trump threatened new tariffs on Beijing.

Meanwhile, the safe-haven gains for the US dollar limited gold's advance, with the dollar index hitting a more than one-week peak.

Gold had fallen more than 1% on Wednesday, weakened by the dollar strength and as some bullion refineries restarted production, easing concerns over global supply.

"In the near-term gold may come in for some further pressure. But with interest rates so low, there is probably a limit to how far gold can fall, even in the case of an end to lockdowns," said Stephen Innes, chief market strategist at financial services firm AxiCorp.

Central banks around the world have cut interest rates and rolled out a wave stimulus measures to limit the economic damage from the virus.

Gold tends to benefit from widespread stimulus measures because it is widely viewed as a hedge against inflation and currency debasement.

Elsewhere, palladium climbed 0.6% to $1,809.12 per ounce, platinum gained 0.6% to $753.37 and silver rose 0.8% to $15.03.