NEW YORK (MarketWatch) -- Gold futures rose Thursday to six-month highs, with the December contract approaching $1,000 an ounce as a weakening dollar and fund buying pushed up prices. Gold for delivery next year topped the key psychological level of $1,000.

Gold for December delivery, the most active contract, gained $19.20, or 2%, to end at $997.70 an ounce on the Comex division of the New York Mercantile Exchange, the highest level for the contract since Feb. 23. It rose as high as $999.50 earlier.

The October contract ended at $996.30, while gold futures for April delivery ended at $1,000.20 an ounce. Nearby gold futures had topped $1,000 an ounce in February.

The London fixing, a global gold benchmark, rose to $983 an ounce Thursday, the highest level for an afternoon fixing since Feb. 24.

"Fund buying, momentum buying, short covering, all together buying" pushed up gold prices, said George Gero, a precious-metals trader for RBC Capital Markets. "Many will take fearsome Friday off so there may be book squaring today."

The dollar moved lower against the euro and the British pound Thursday, but remained higher against the Japanese yen, after economic data showed the number of people filing for initial unemployment benefits fell last week in the U.S.

In Europe, the European Central Bank left its key interest rate unchanged. A weaker greenback tends to push up dollar-denominated gold prices.

Holdings in SPDR Gold Trust GLD, -0.60% rose slightly to 1,063.36 metric tons on Wednesday, up 1.53 metric tons from the prior day.

Gold was rising "amid some of the poorest fundamentals in recent memory," said Jon Nadler, senior analyst at Kitco Metals Inc. "For the short term anyway, the market still needs a close or two in the $990s to go for" the $1,000 mark.

Gold jewelry demand from India, the world's biggest gold consumer, slumped 52% in the first quarter compared with a year ago, and 31% in the second quarter, according to the World Gold Council.

Despite the decline, "we continue to expect demand to improve in the run-up to a seasonally strong period compared to the depressed start of the year," said Suki Cooper, an analyst at Barclays Capital, in a note.

Gold prices typically rise in September, an analysis of the historical record shows, as the start of holiday seasons in the world's biggest gold-consuming countries tends to drive up demand.

Gold made gains for the past 16 out of 20 Septembers. That's a better track record than any other month of the year, a MarketWatch analysis of gold prices measured by the London fixing showed. See full story.

In other metals dealings, silver for December delivery rallied 92.5 cents, or 6%, to $16.29 an ounce.

October platinum also gained, adding $23.70, or 1.9%, to $1,253.80 an ounce, while December palladium rose $5.10, or 1.8%, to $294.05 an ounce.

Copper for December delivery rose 3.9 cents, or 1.4%, to $2.865 a pound.

In other commodities, crude-oil futures prices stabilized, partly in reaction to government data showing that U.S. gasoline consumption jumped last week. See Futures Movers.

In economic news Thursday, the number of people filing for state unemployment benefits for the first time fell by 4,000 to a seasonally adjusted 570,000 last week, the Labor Department reported.

The figures come one day before the government reports on the August employment data. Economists surveyed by MarketWatch are looking for another sizable job loss of 250,000. The unemployment rate is expected to rise to 9.5%. See related story.

Earlier Thursday, the European Central Bank kept interest rates at a record-low 1% as central bankers in the 16-nation euro zone expressed skepticism that an economic recovery will take hold. See full story.