New claims for jobless benefits last week held at levels suggesting sluggish growth in hiring and factory activity in the mid-Atlantic region contracted in May, worrisome signs for a still-fragile economic recovery.

Initial claims for state unemployment benefits held at 370,000, the Labor Department said on Thursday. That was a little higher than analysts forecasted in a Reuters poll.

“We are really not showing much momentum in the labor market at this time,” said Sean Incremona, an economist at 4Cast in New York.

The International Monetary Fund (IMF) is planning to purchase more than $2 billion worth of gold on account of rising global risks. The IMF currently holds around 2800 tonnes of gold at various depositories.

“The Fund is facing increased credit risk in light of a surge in program lending in the context of the global crisis. While the Fund has a multi-layered framework for managing credit risks, including the strength of its lending policies and its preferred creditor status, there is a need to increase the Fund’s reserves in order to help mitigate the elevated credit risks”, Bloomberg quotes a report by an IMF staff while also adding that a $2.3 billion gold purchase is in the planning.

IMF’s borrowers include Eurozone countries like Greece and Portugal. Greece is IMF’s biggest borrower and the nation is currently caught in a political deadlock that seems bent on denying itself the much needed bailout fund.

Greek political leaders stuck to entrenched positions before another round of coalition talks on Monday, dashing hopes of a last-minute compromise to avoid a new election that risks pushing the country closer to financial default.

European shares slid and Spanish and Italian bond yields rose as investors fretted the political deadlock meant Greece was on track to become the first country to abandon the euro.

Greece’s political landscape has been in disarray since an inconclusive election on May 6 left parliament divided between supporters and opponents of a 130 billion-euro ($168-billion) EU/IMF bailout, with neither side able to form a government.

China’s economy stuttered unexpectedly in April with lower than expected output data, softening retail sales and easing prices suggesting economic headwinds might be stiffer than thought, requiring more robust policy responses to counter them.

Industrial output expanded at its slowest annual pace in April in nearly three years, while fixed asset investment growth dipped to its lowest in almost a decade.

The weak growth in fixed asset investment signaled that the impact of a prolonged credit crunch in China’s real estate sector, and of flagging demand from export markets, was more severe than first thought.

Gold rose on Thursday after touching a four-month low in the previous session, as an uptick in the euro after Spain moved to clean up its banks and Europe’s bailout fund approved a key payment to Greece took some pressure off prices.

While the euro zone debt crisis simmers, moves to address some of its problems temporarily improve investor appetite for assets seen as higher risk, like stocks and commodities, as well as the single currency.

Spot gold was up 0.4 percent at $1,597.33 an ounce at 09.42 a.m. EDT, after falling as low as $1,579.30 an ounce on Wednesday, its weakest since early January. U.S. gold futures for June delivery were up $3.80 an ounce at $1,597.90.

Stocks rebounded from session lows on Wednesday as optimism grew that Greece was likely to get a bailout payment approved.

Stocks had tumbled more than 1 percent earlier in the session, with the S&P 500 hitting a two-month low over concerns about political uncertainty in Greece and Spain’s weak banks.

The yield on the 10-year Spanish bond climbed over 6 percent, seen as a troublesome level among investors, after Spain came up with a plan to demand banks set aside another 35 billion euros ($45 billion) against loans to the ailing building sector. Huge bank losses have raised fears that the country may need an international bailout.

The euro fell for a seventh straight session against the dollar on Tuesday on worries that political uncertainty in Greece and a change of French presidents could threaten austerity plans seen as key to tackling the euro zone debt crisis.

The euro fell below the psychological level of $1.30 after the leader of Greece’s Left Coalition party said the country’s Greece’s commitment to an EU/IMF rescue deal has become null and void.

“The euro reacted to the Greece headlines, but the move lower has faded a bit because what he said was not so unexpected,” said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

The euro dropped broadly on Monday after elections in Greece and France cast doubt on politicians’ commitment to austerity plans aimed at tackling the euro zone debt crisis.

Renewed worries about the stability of the euro zone made the euro pierce the key psychological level of $1.30 on its way to hitting a three-month low against the dollar.

The euro also fell to its lowest in 3-1/2 years against the British pound and a 2-1/2 month trough versus the yen, but trade in the overnight session was quiet due to a UK holiday.

The number of Americans filing new claims for jobless aid fell more than expected last week, easing fears the labor market recovery was stalling.

Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 365,000, the Labor Department said on Thursday.

The biggest weekly drop in claims since early May last year helped to lift some of the dark cloud cast over the labor market by a report on Wednesday from payrolls processor ADP showing private employers in April created the fewest jobs in seven months.

“This offsets the concerns from yesterday’s ADP number. You’re getting mixed signals…It might not be as bad as we were thinking after ADP,” said Phil Flynn, a senior market analyst at PFG Best in Chicago.

Companies hired a far fewer than expected 119,000 people in April, the smallest gain in seven months and adding to concerns that the economy has lost some of its momentum.

The ADP National Employment Report released on Wednesday fell below economists’ expectations for a gain of 177,000 jobs, while March’s figure was also revised lower. April’s figure was the smallest gain since September of last year.

The report by ADP, a payrolls processor, is published two days before the government’s broader and much watched monthly jobs report.