Gold hovers above eight month high ahead of US jobless claims data

The shiny metal advanced for the third straight session above eight-month high on worries global recovery is losing momentum after a wave of downbeat data, especially from the United States.

Spot gold is trading at $1241.90 an ounce after recording a high of $1243.31 and a low of $1237.40.

Later in the day, US continuing claims will rise to 4498 thousands on August 21 from 4478 thousands, while initial claims will retreat to 490 thousands from 500 thousands, according to median estimates.

The drop in US durable goods and home sales yesterday added to concerns that the world's largest economy is in the throes of a double- dip recession and the Fed may keep interest rate near zero to boost growth.

Heads of central banks will meet today where they are expected to keep both borrowing cost and stimulus unchanged to reinforce recovery.

Yesterday, gold shed $9.60 or 0.78% to close at $1239.82 an ounce. Gold Price was setin London on Wednesday at $1237.50 per ounce unchanged from the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, lingered at 1,299.47 on August 25.

The yellow metal is also benefiting from the dollar's drop for the second day against a basket of major currencies as depicted by the dollar index which slipped to 82.88 from the day's opening at 83.20.

Oil also surged for the second day to $73.07 a barrel from yesterday's closing at $72.87, spurred by the dollar's decline and rebound in Asian shares from one-month low.

In the coming period, gold may rise further with more expected physical demand from India, the world's largest gold buyer, where festival season begins next week and ends in November.

Among other precious metals, platinum soared to $1532.70 from $1528.50 on Wednesday; palladium edged up to $498.20 from $492.70; and silver rallied to $19.02 from $18.89, as of 08:00 GMT.