NEW YORK: Gold rose over 1% on Thursday buoyed by a retreat in the dollar and US bond yields, while grim US jobless data clouded the outlook for an economic recovery, adding to the metal’s safe-haven appeal.

Spot gold rose 1.2% to $1,727.86 per ounce by 1:39 p.m. EDT (1739 GMT). Most markets will be closed for Good Friday on April 2.

US gold futures settled up 0.7% at $1,728.30.

“This is an upward correction in a structured bear market,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago, adding gold could climb to $1,740 before yields resume its uptrend to push gold back down again.

The dollar index retreated from Wednesday’s five-month peak, making gold less expensive for other currency holders. Benchmark US Treasury yields also eased.

Also bolstering safe-haven gold’s appeal, data showed the number of Americans filing new claims for unemployment benefits rose unexpectedly last week.

US President Joe Biden’s announcement of a long-awaited $2 trillion-plus job plan on Wednesday which has raised concerns over inflation, also supported the metal.

While gold is considered a hedge against inflation, higher bond yields have threatened that status as they increase the bullion’s opportunity cost.

“A retreat in yields, as inflation pressures recede holds out the possibility of a recovery in gold prices,” James Steel, chief precious metals analyst at HSBC wrote in a note.

On the physical demand front, India’s gold imports in March surged to a record 160 tonnes, a government source told Reuters.

Among other precious metals, silver was up 2.1% at $24.89 per ounce, while platinum gained 1.8% to $1,208.42 and palladium rose 1.3% to $2,651.79.

The closure of Russian palladium producer Nornickel’s two Siberian mines has aggravated an already severely tight palladium market, ED&F Man Capital Markets analyst Edward Meir said, adding the metal could climb further.