Gold prices climbed on Thursday, buoyed by a weakness in the dollar and Treasury yields, with investors awaiting crucial U.S. payrolls data that could help ascertain the Federal Reserve's interest rate trajectory.

Spot gold rose 0.4% to $2,032.90 per ounce by 1155 GMT. U.S. gold futures gained 0.1% to $2,050.20.

Yields on 10-year Treasury notes hovered near a three-month low, while the U.S. dollar index fell 0.3% against its rivals, making gold less expensive for other currency holders.

"The biggest short-term concern is the risk that too many rate cuts have been priced in. With that in mind, Friday's job report will be another important piece in the puzzle," said Ole Hansen, Saxo Bank's commodity strategy head.

Data this week showed gradual signs of a cooling labor market in the United States, with job openings falling to 2-1/2-year lows in October.

The spotlight is now on the U.S. non-farm payrolls data on Friday, ahead of the Fed's updated economic and interest rate projections at their Dec. 12-13 policy meeting.

Recent dovish comments from Fed officials and a slew of weaker-than-expected economic data raised expectations that U.S. interest rates have peaked and the central bank may begin to cut rates early next year.

Traders are pricing in about a 60% chance of a rate cut by March next year, CME's FedWatch Tool shows. Lower interest rates tend to support non-interest-bearing bullion.

"Broadly speaking, (gold) is just effectively waiting for the big U.S. data points and the Fed meeting before making that next move," said Craig Erlam, senior markets analyst at OANDA.

"The NFP data is ultimately going to determine whether gold breaks record highs again or we see some profit taking in a bit of a correction."

Spot silver was up 0.1% at $23.89 per ounce, platinum rose 0.6% to $894.71 and palladium climbed 1.8% to $960.49 per ounce.

(Reporting by Anjana Anil and Hissay Ongmu Bhutia in Bengaluru; Editing by Sohini Goswami)