By Clara Denina
LONDON (Reuters) - Gold rebounded on Thursday from three straight days of losses as the dollar pared gains after a larger than expected rise in weekly jobless claims in the United States.
The number of people filing for unemployment benefits rose 17,000 to a seasonally adjusted 274,000 last week, the biggest gain in more than a year, the Labor Department said.
Spot gold, lower initially, rose 0.2 percent to $1,281.60 an ounce by 1348 GMT, though that was still down 1.5 percent from Monday's peak. U.S. gold futures rose 0.7 percent to $1,284.30.
"Tomorrow's NFP remains the focal point," Macquarie analyst Matthew Turner said, referring to U.S. non-farm payrolls data due on Friday.
"Strong employment growth in the U.S. is what is keeping alive the dollar's bull case and any signs it is flagging, without any benign explanation such as a tighter labour market, would be very bullish gold," Turner said.
More From This Section
Gold jumped to a 15-month high of $1,303.60 on Monday when the dollar slumped against the yen after the Bank of Japan stood pat on policy - before the U.S. currency recovered.
The precious metal has risen 21 percent this year as expectations the Fed would push ahead with interest rate increases faded.
Gold is sensitive to interest rates and returns on other assets as higher rates lift the opportunity cost of holding the metal.
"Gold is likely to hold in the current range between $1,250 and $1,300 until the end of the quarter, when we will have more clarity about the Fed's interest rates path," Natixis analyst Bernard Dahdah said.
"We need a streak of positive data points from the U.S., which I'm not expecting this quarter, due to the impact of global growth weakness," Dahdah said.
Investor interest in gold remains robust. Assets in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.07 percent to 825.54 tonnes on Wednesday, their highest in more than two years.
Among other precious metals, silver rose 1.1 percent to $17.55 an ounce, platinum was up 0.6 percent at $1,063.70 and palladium gained 1.2 percent to $604.50.
(Additional reporting by A. Ananthalakshmi in Singapore; editing by David Clarke)