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U.S. weekly jobless claims unchanged at low levels

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Israel has signalled it will retaliate against Iran

(Rewrites as of 1344 GMT)

By Ashitha Shivaprasad

April 18 (Reuters) - Safe-haven gold gained on Thursday

as persistent tensions in the Middle East added to the metal'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 9:44

a.m. ET (1344 GMT). Prices touched an all-time 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

$2,500-$2,600, 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.

Bullion'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

non-yielding gold.

Bank of China International (BOCI) analyst Xiao Fu said that

with rate cut expectations from the Fed coming down and with the

natural profit-taking that comes when prices rally quickly,

there might be some pressure on gold, but a sharp decline is

unlikely.

Spot silver rose 0.5% to $28.36 per ounce.

"The silver shortage narrative is gaining attention, with

demand consistently outpacing new supply. This imbalance could

lead to a significant price adjustment in the future," said

Alexander Zumpfe, a precious metals trader at Heraeus Metals.

"Long-term trends in the silver market remain bullish, and

while short-term price movements can be volatile and influenced

by futures trading."

Platinum was flat at $938.15, and palladium

gained 0.8% to $1,034.50.