U.S. weekly jobless claims unchanged at low levels
Israel has signalled it will retaliate against Iran

April 18 Reuters Safehaven gold gained on Thursday as persistent tensions in the Middle East added to the metal39;s appeal despite robust economic data from the U.S. that raised prospects of fewer interest rate cuts.

Spot gold firmed 0.8 at 2,378.53 per ounce at 944 a.m. ET 1344 GMT. Prices touched an alltime high of 2,431.29 last Friday.

U.S. gold futures rose 0.2 to 2,392.90.

In the Middle East, Israel has signalled it will retaliate to a volley of attacks from Iran despite calls for restrain from Western countries but has not said how.

When there are geopolitical tensions, the natural response is for investors to flee to gold, which is happening now. If the conflict further escalates, prices could go north of 2,5002,600, and if there is a ceasefire, then they could fall to 2,200, said Everett Millman, chief market analyst with Gainesville Coins.

Central bank purchases are also placing a floor beneath the prices, he added.

Bullion39;s upside came despite data showing U.S. weekly jobless claims were unchanged at low levels last week. Strong U.S. economic data and hawkish rhetoric from Fed officials have prompted investors to drastically rethink the chances of the Federal Reserve cutting rates any time soon.

Higher interest rates reduce the appeal of holding nonyielding gold.

Bank of China International BOCI analyst Xiao Fu said that with rate cut…