Silver set for best week since May 17
U.S. nonfarm payrolls report due at 1230 GMT
Palladium on track for third straight weekly gain

July 5 Reuters Gold prices firmed on Friday and were set for a second straight weekly gain, while traders awaited U.S. employment data to gauge the trajectory of the Federal Reserve39;s potential interest rate cuts.

Spot gold rose 0.3 at 2,363.19 per ounce, as of 0506 GMT and was up more than 1 for the week. U.S. gold futures gained 0.1 to 2,372.60.

The U.S. dollar was on track for a weekly decline, making dollar pricedbullion more attractive to buyers holding other currencies.

Gold has enjoyed a productive week so far, with the precious metal being a beneficiary of some weaker U.S. macro data, said Tim Waterer, KCM Trade39;s chief market analyst.

Economic data on Wednesday, including weak services and ADP employment reports, pointed to a slowing U.S. economy. A separate report showed an increase in initial applications for U.S. unemployment benefits last week.

Market spotlight is on the U.S. nonfarm payrolls report due at 1230 GMT.

If the jobs data misses the mark on the lower side, I expect investors will start to further fancy a possible September rate cut from the Fed, which could see gold have another crack at the 2,400 level, Waterer said.

Traders are currently pricing in about a 73 chance of a Fed rate cut in September, according to CME FedWatch Tool.

Lower interest rates reduce the opportunity cost of holding…