Gold rose over 1% on Thursday buoyed by a retreat in the dollar and U.S. bond yields, while grim U.S. 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.

U.S. 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 U.S. 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.             

U.S. 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. 

(Reporting by Shreyansi Singh and Nakul Iyer in Bengaluru, Editing by Alistair Bell and Marguerita Choy)

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