NEW YORK/LONDON Gold prices firmed on Thursday, but stayed around $1,530 an ounce, as most investors held onto current positions ahead of the next day's much-anticipated U.S. June jobs report.
Two U.S. labor market reports released on Thursday came in stronger than expected, but neither would necessarily translate into bigger-than-forecast payrolls growth for June.
"Prices will stay in range ahead of payrolls. Because, at this point, I don't think people want to get themselves too heavily involved in a position if they're not already in it," said Fred Schoenstein, precious metals trader at Heraeus Precious Metals Management in New York.
"We're going to sit tight until we see Friday's report."
Spot gold was at $1,531.86 an ounce by 3:00 p.m. EDT against $1,527.50 late in New York on Wednesday. In futures, U.S. gold for August delivery settled at $1,530.60, a $1.40 gain.
Spot gold climbed as far as $1,534.20 an ounce, its highest since June 23, though surpassing the previous high by less than $1. Still, it continued to recover from two consecutive weeks of losses.
Earlier, U.S. payrolls processor ADP reported that private-sector employment increased by 157,000 jobs in June, a rise more than double economists' expectations.
A drop in the number of Americans filing last week for unemployment benefits also offered hope for the labor market, though they remained too high to signal robust growth.
For Friday's June U.S. employment figures, economists on average forecast 50,000 new jobs were created.
An upside surprise in payrolls, however, would strengthen the view that the U.S. economy was emerging from the doldrums of the first half of the year, undermining the safe-haven bid that had sent gold to two-week highs.
Similarly, a weaker-than-forecast jobs report could push gold further toward the upper end of the range that has held since April, en route to all-time highs.
"If you see something that's unexpected (in payrolls), we'll see it (gold) move in either direction. I'm just not sure which way that will be," Schoenstein said.
Gold is also caught by other competing influences, including signs that inflation is heating up, as with the European Central Bank and Bank of China interest rate increases, and euro zone debt troubles that provide a safe-haven underpinning.
Bullion prices were down for much of the day, slipping after the ECB raised interest rates again and offered to help Portugal stay solvent. The news did little to dispel concern about the euro zone's debt problems, which provided underlying price support to the yellow metal.
The ECB raised its benchmark refinancing rate by 25 basis points to 1.50 percent, as markets had widely anticipated, and President Jean-Claude Trichet signaled in the post-meeting news briefing the bank would continue to tighten policy to prevent inflation from undermining economic growth.
"The rate hikes we see -- a slow gradual increase in the future -- aren't nearly enough to drive people out of gold and into higher-yielding assets," RBS analyst Daniel Major said.
The euro gained against the dollar, snapping two days of declines, after Trichet said the ECB would relax rules and continue to provide liquidity to Portugal.
Broader concerns over debt levels in some smaller euro zone economies, including Greece, Portugal and Ireland, were a key factor pushing gold prices to record highs above $1,575 an ounce in May.
On the supply side, talks between striking Indonesian workers at the Grasberg mine and Freeport McMoRan Copper & Gold's (FCX.N) management have broken down, leaving production halted at the world's biggest copper and gold mine, a government official said.
Silver was higher at $36.41 an ounce than $35.85 at Wednesday's close.
Spot platinum was higher at $1,744.50 an ounce than $1,721.60 on Wednesday, and spot palladium rose to $783.72 an ounce from $762.48 previously.
(Reporting by Jan Harvey and Amanda Cooper in London and Carole Vaporean in New York; Editing by William Hardy, Alden Bentley and Dale Hudson)