Feb 2 (Reuters) - Gold prices steadied on Friday as investors awaited U.S. non-farm payrolls data later in the day for hints on when the Federal Reserve might start cutting interest rates, but bullion was still headed for its biggest weekly rise since December.
Spot gold was flat at $2,054.60 an ounce at 1230 GMT. U.S. gold futures were up 0.1% at $2,073.00.
Prices have added about 2% this week, having hit their highest since Jan. 3 in the previous session as investors remained hopeful that the Fed would cut rates fairly soon.
Fed Chair Jerome Powell this week dismissed the idea of lowering interest rates in the spring but voiced confidence that inflation would return to the 2% target.
"The remarks from Fed have not managed to damage the support scenario for gold," said Carlo Alberto De Casa, market analyst at Kinesis Money.
"What can be a problem for gold is if markets are betting on interest rates being higher for longer, but now the market is sure that the rates are going down this year."
According to the CME Fed Watch, opens new tab Tool, traders now expect a 94% chance of a rate cut in May. Lower interest rates boost non-yielding bullion's appeal.
"A transition from tightening monetary policy to easing in H2, elevated geopolitical risks and strong central bank buying should bode well for gold investment demand," ANZ said in a note.
Investor focus is on U.S. non-farm payrolls data due at 1330 GMT, which is expected to show that job growth slowed marginally in January.
Among other precious metals, spot silver edged up 0.2% to $23.2186 an ounce, platinum rose 1% to $922.06 and palladium was up 1.4% at $975.99.
Reporting by Sherin Elizabeth Varghese in Bengaluru Editing by Mark Potter and David Goodman
