NEW YORK/LONDON (Reuters) - Gold rose to its highest price in one month on Thursday as the dollar slipped further below a 14-year peak hit earlier this week, while palladium turned lower after extending this week's steep gains to a four-week high.
Spot gold XAU= rose as much as 1.85 percent to its highest since Dec. 5 at $1,184.90 an ounce and was up 1.5 percent at $1,180.94 by 3:11 p.m. EST (2011 GMT). Spot prices were heading for a 2.5 percent gain for the week, the strongest since June.
"Although the wider picture hasn't changed and U.S. growth is improving, there shouldn't be any further significant appreciation in the dollar after the strong run of the past few months and uncertainty about economic policy changes going forward," Commerzbank analyst Daniel Briesemann said, adding that this should be supportive for dollar-denominated gold.
U.S. gold futures GCcv1 settled up 1.5 percent at $1,181.30 per ounce.
"Continuing jobless claims were higher than expected, supporting gold and helping to weaken (the) U.S. dollar this morning," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.
"There may be some retracement yet it looks like a bull market is in the making."
The dollar .DXY extended losses against a basket of six major currencies after data showed U.S. private employers added 153,000 jobs in December, below economists' expectations.[FRX]
Palladium XPD= is up around 8 percent so far this week, on track for its biggest weekly gain since July, despite falling from a four-week high of $747.80 an ounce on Thursday. It later fell 0.4 percent to $732.50.
The metal, mostly used to clean exhaust emissions from gasoline-powered catalysts, has been bought in anticipation of record vehicle sales in the United States and was also boosted by a lower dollar, analysts said.
"We are seeing continued strong growth in car sales, which is particularly good for palladium. And in general for the industrial element, there is a very strong growth environment that is taking shape, which is supportive," ETF Securities analyst Martin Arnold said.
Platinum XPT= was up 2.8 percent at $966.20, after reaching its highest in nearly eight weeks at $975.80. It was heading for a 7.9 percent weekly gain.
Buying from China, the biggest gold consumer, also supported the gold rally, traders said.
"The Chinese New Year is around the corner. Gold kilobar demand is picking up right now, with strong premiums on the mainland," a Japan-based precious metals trader said.
Spot silver XAG= was up 0.85 percent at $16.56.
Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Catherine Evans and Meredith Mazzilli