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Silver prices at a 14-year high

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Bullion hit a record high of $3,673.95 on Tuesday

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All precious metals headed for weekly gains

(Updates for U.S. morning hours)

By Sherin Elizabeth Varghese and Sarah Qureshi

Sept 12 (Reuters) - Gold prices rose on Friday, holding

close to record highs hit earlier this week, as signs of a

weakening U.S. labor market reinforced expectations the Federal

Reserve will deliver its first rate cut of the year next week.

Spot gold was up 0.4% at $3,649.54 per ounce, as of

09:19 a.m. EDT (1319 GMT), remaining close to Tuesday's all-time

high of $3,673.95. The metal has gained 1.8% so far this week

and is poised for a fourth consecutive weekly advance.

U.S. gold futures for December delivery were up 0.4%

at $3,688.10.

"Weaker employment and spotty inflation... priced in with

the Fed having to cut rates is pushing metals higher because

there is the risk of longer-term inflation," said Daniel

Pavilonis, senior market strategist at RJO Futures.

Recent data showing jobless claims surged last week, even as

consumer prices posted their sharpest monthly increase in seven

months in August, has boosted the shift in rate expectations.

Investors, however, are prioritizing signs of labor market

weakness over sticky inflation in shaping rate expectations.

Fed fund futures fully price in a 25-basis-point cut at the

Fed's September 17 meeting, though expectations for a larger

50-bps move have eased.

"Given these tailwinds and following the recent step higher

in exchange-traded fund flows (ETFs), we now look for gold to

rise to $3,900/oz by mid next year," said UBS analyst Giovanni

Staunovo.

The yellow metal has risen 39% so far this year and is often

seen as thriving in lower-rate settings, valued by investors as

a hedge against inflation and broader uncertainty.

Meanwhile, China's central bank on Friday sought public

feedback on plans to simplify gold import and export rules by

streamlining licensing.

Elsewhere, spot silver rose 1.3% to $42.08 per ounce,

at a 14-year high, platinum was up 1.4% at $1,397.61 and

palladium gained 2.2% to $1,214.70. All three metals were

set for weekly gains.