PRECIOUS-Gold set for sixth successive weekly gain; US payrolls report in focus

Updates with mid-session trading

By Rahul Paswan

Feb 7 (Reuters) - Gold prices rose on Friday, hovering near record-high levels and set for a sixth successive weekly gain, as trade war concerns fuelled safe-haven buying ahead of the key U.S. payrolls report.

Spot gold XAU= was up 0.3% at $2,864.11 per ounce, as of 0721 GMT, and has gained more than 2% this week. Bullion hit an all-time high at $2,882.16 on Wednesday.

U.S. gold futures GCcv1 gained 0.4% to $2,887.50.

"It's still a trending market and we will continue to see gold prices pushing to newer heights because now it's uncharted territory," said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.

Earlier this week, the World Trade Organization said China initiated a dispute over the U.S. tariffs.

Goldman Sachs said they see an upside risk to their $3,000 target from elevated U.S. policy uncertainty to the central bank and investor hedging demand.

Focus is now on the U.S. employment report for any hints on the interest rate cycle.

A full-employment economy with solid growth and falling inflation will let the Federal Reserve continue cutting rates, though uncertainty about impact of tariffs and other policy changes argues for a slower approach, Chicago Fed President Austan Goolsbee said on Thursday.

Gold is considered a safe investment during economic and geopolitical turmoil, but higher interest rates reduce the non-yielding asset's appeal.

"We expect the Fed will be cutting another 100 basis points this cycle. This will see U.S. Treasury yields falling... reducing the holding cost for gold," ANZ said in a note.

Indian gold demand was negligible this week as record-high prices deterred buyers, while demand in top consumer China remained subdued as it returned from the Lunar New Year holidays.

Spot silver XAG= rose 0.2% to $32.26 per ounce and platinum XPT= was flat at $985.80, while palladium XPD= shed 0.1% to $977.33.

Both silver and platinum were seen rising this week, while palladium was headed for a weekly loss.