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Gold prices were steady near one-week highs on Friday, on track for a small weekly rise, aided by a weaker dollar as investors awaited U.S. payrolls data to gauge the strength of labor market and the scale of a potential interest rate cut this month.
Spot gold was little changed at $2,517.00 per ounce by 0918 GMT, holding near a one-week high of $2,523.29 hit in the previous session. Bullion has added around 0.6% so far this week.
U.S. gold futures firmed 0.2% to $2,547.10.
"Gold's presence above the psychological $2,500 line is being sustained by the weaker U.S. dollar, after both the ADP and JOLTS figures came in at their lowest respectively since 2021," said Han Tan, chief market analyst at Exinity Group.
Data on Thursday showed that U.S. private employers hired the fewest number of workers in 3-1/2 years in August. Attention is now on U.S. non-farm payrolls (NFP) data due at 1230 GMT.
"The apparent weakening of the U.S. labor market has raised hopes of faster interest rate cuts. Today's U.S. labor market report could strengthen or dampen expectations accordingly," Commerzbank said in a note.
Following the labor data this week, the chances of a 25-basis-point (bp) reduction by the Fed on Sept. 18 came down to 57% from about 65% a week before, while those of a bigger 50-bp reduction rose to 43% from 35% last week, according to the CME FedWatch tool.
Bullion typically performs better in a low-interest-rate environment as it does not pay any interest.
New York Fed President John Williams and Fed board governor Christopher Waller will also deliver remarks later in the day.
The dollar fell 0.2%, making gold less expensive for other currency holders.
Spot silver fell 0.2% to $28.76.
Platinum gained 0.5% to $929.10 while palladium fell 0.4% to $937.50 and was headed for a weekly loss.
(Reporting by Daksh Grover in Bengaluru, additional reporting by Swati Verma, editing by Alexander Smith)