Gold prices held steady on Friday, on course for a fifth straight week of gains, as investors awaited a key U.S. labor market report after upbeat jobless claims data in the previous session helped send bullion to a two-month high.

Bullion prices have risen more than 12 percent so far this year, and the climb gathered pace last week after the U.S. Federal Reserve said it was likely to keep interest rates at ultra-low levels at least through 2014, putting pressure on the dollar.

A cheaper greenback makes dollar-denominated commodities more affordable to holders of other currencies.

The Fed's promise to keep low rates and expectations on the third round of quantitative easing have raised hopes on increasing liquidity, which will continue to push gold higher, said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.

However, gold could meet heavy resistance at the $1,800 level on its way up, Hou said. The metal faltered at this level during its previous run higher in November last year, retracing to nearly $1,500 an ounce.

Financial markets will be watching the U.S. non-farm payrolls report, due at 1330 GMT, after data on Thursday showed a surprise fall in jobless claims last week.

Spot gold edged down 0.1 percent to $1,757.49 an ounce by 0646 GMT, on course for a 1.1-percent gain from a week earlier. It hit a two-month high of $1,760.96 on Thursday.

The Relative Strength Index on spot gold stood at 72.6. A reading above 70 suggests the underlying market is overbought.

U.S. gold was little changed at $1,760.50 and headed for a 1.5 percent weekly rise.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose nearly half a percent to 1,277.135 tonnes by Feb 2 -- their highest since December 20.

Physical markets in Hong Kong and Singapore remained lukewarm, with scrap selling drying up as the upward momentum appeared intact and high prices dampened buying interest, dealers said.

At this price level, people are not eager to enter new positions, said a Singapore-based dealer, adding that a dip back to the $1,700 level could trigger some physical buying.

Gold bar premiums in Singapore were in the range of 70 cents to $1 per ounce above London prices, she added.

Spot palladium hit a 4-1/2-month high of $713.50, before easing to $711.97. The metal, mainly used in producing autocatalysts for gasoline-powered engines, was headed for a third straight session of gains.

Supporting sentiment in palladium, U.S. auto sales in January shot up more than 11 percent, a surprisingly strong showing that marked the strongest annualized sales rate in nearly two-and-a-half years.

Spot silver lost 0.2 percent to $34.19 an ounce, just below a 2-1/2-month high of $34.39 hit in the previous session. The metal was on course for a 1-percent weekly gain and led the precious metals complex with a 23.5-percent year-to-date increase.