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Gold Surges to Two-Week Closing High (Update 1)

Stocks in this article: GLDIAUABXEGOKGC

Updated from 11:10 a.m. ET with settlement prices

NEW YORK ( TheStreet) -- Gold prices jumped on Thursday to close at its highest level in two weeks as investors turned to the yellow metal for its safe-haven appeal amid softer than expected economic data.

Gold for August delivery at the COMEX division of the CME popped $20.20 to $1,412. The gold price traded as high as $1,417.70 and as low as $1,388.40 an ounce, while the spot price was adding $21.60, according to Kitco's gold index.

Gold last closed above $1,400 an ounce on May 14.

"The gold bulls are showing some resilience at lower price levels; if we can push prices higher from here you are probably going to see a bullish technical formation," Jim Wyckoff, a senior analyst at Kitco.com, said in an interview. "You're seeing some resilience that's keeping a floor under the market."

The Bureau of Economic Analysis said its second estimate of first-quarter U.S. gross domestic product rose year-over-year by 2.4%, which was a 0.1 percentage point dip from the initial reading. Economists polled by Thomson Reuters were expecting the revision to remain unchanged at 2.5%.

The Labor Department also reported weaker-than-expected data as initial jobless claims for the week ended May 25 rose 10,000 to 354,000. Economists polled by Thomson Reuters were expecting claims to increase to just 340,000.

"Third jobless claims rise in four weeks is a help to allay fears of Federal Reserve tightening for now as well," George Gero, precious metals strategist at RBC Capital Markets, wrote in a note.

Silver prices for July delivery lifted 24 cents to $22.42 an ounce, while the U.S. dollar index was dropping 0.71% to $83.03.

The state of the labor market data has a close correlation to the Fed's decision on whether to scale back its monetary stimulus because part of the Fed's dual mandate has been to bring the unemployment rate down to 6.5% before it begins raising interest rates.

The Fed likely will begin drawing down its quantitative easing efforts -- which are positive for gold fundamentals as the precious metal is seen as a hedge against inflation -- ahead of raising the federal funds rate.

Gold mining stocks were popping on Thursday. Shares of Eldorado Gold (EGO) were spiking 5.2%, while shares of Kinross Gold (KGC) was up 7.7%.

Among volume leaders, Barrick Gold (ABX) was increasing 6.4%.

Gold ETF SPDR Gold Trust (GLD) was climbing 1.4% to $136.74 a share, while iShares Gold Trust (IAU) was gaining 1.5% to $13.74.

-- Written by Joe Deaux in New York.

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