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Could poor economic data give the gold market a boost? That seems to be the case today as gold rises following a larger-than-expected rise in weekly jobless claims. The U.S. Department of Labor reported today that weekly jobless claims rose by 7,000 to a level of 251,000. This is up from last week’s figure of 244,000 new claims and could be pointing to further weakness in the labor market ahead.

Consensus estimates were looking for a rise of 240,000 claims, making this the third consecutive week that claims have risen above expectations. It also represents the seventh consecutive week that claims have risen higher in what could be a worrisome trend.

The worse-than-expected jobless claims have put the brakes on the dollar today. The currency has been on the ascent in recent months, and has likely been a major roadblock to higher gold during that time. The dollar has likely been seeing some benefit from the Fed raising rates aggressively and from the notion that the central bank will continue to do so in the year ahead.

Although the dollar has been rising on the back of an aggressive Federal Reserve and policy expectations, there are still numerous reasons for the currency to eventually fail and reverse course. Massive sovereign debt may be the primary, bearish issue for the dollar. The Fed simply has no mway of ever being able to repay the nation’s debts without a massive currency debasement. The idea of higher interest rates only makes matters worse, as it will add billions to the amount paid by the U.S. in interest on an annual basis. Something’s gotta give, and the day of reckoning for U.S. debt will likely arrive sooner rather than later.

The dollar has shown some resiliency in recent weeks and today may be no different. The greenback is attempting as of this writing to return to the highs of the session after taking a significant dip earlier in the day. Although gold can manage to stay elevated while the dollar climbs, a stronger dollar makes it more challenging as it may limit the amount of foreign buying in the metal. Trading around a 20-year high currently, the dollar could send another wave of selling into gold should it continue its recent upside and keep moving higher. With the Fed seemingly ready to raise rates by another 75-basis points or more next week, the dollar rally could have more ground to cover in the near future.

The $1700 and $1800 levels remain key for the market. The bears will try to produce a close below the $1700 level, and if successful, could see a fresh wave of selling enter the market. If the bulls are able to rally and produce a close above the $1800 level, it could have the opposite effect, attracting fresh buyers and momentum players into the market. Volatility has contracted in recent weeks, therefore, the market could be getting ready for a significant move one way or the other.