BENGALURU Gold prices firmed on Friday and were poised for a weekly gain, steered by safe-haven demand and the prospect of a September rate cut by the Federal Reserve, while market participants awaited US payrolls data.

Spot gold was up 0.4% at US$2,455.36 per ounce, as of 0405 GMT, just US$28 shy of the record peak of US$2,483.60 scaled in July. Prices have climbed about 3% for the week.

US gold futures climbed 0.8% to US$2,499.50.

Investors will monitor the US payrolls report due at 1230 GMT for further cues on the monetary policy path.

Federal Reserve chair Jerome Powell said on Wednesday that interest rates could be cut as soon as September, if the US economy follows its expected path.

Trader bets for a 50-basis-point (bp) rate cut in September jumped to 29.5% from 11.8% earlier this week, according to the CME Group's FedWatch tool.

"Gold prices can breach the US$2,500 mark, if we see further flare-up in geopolitical tensions and a weaker jobs report raises bets for a 50 bp cut in September," said Ajay Kedia, director at Kedia Commodities, Mumbai.

"If prices breach the US$2,520 level, then the next technical target is US$2,570."

Bullion is considered a hedge against geopolitical and economic risks, and lower rates reduce the opportunity cost of holding the asset.

The rush for safe assets aided some net flows into gold amid the broader risk-off environment, IG market strategist Yeap Jun Rong said.

Asian shares and US Treasury yields slid, after weaker-than-expected US factory data sparked fears of a worsening economic outlook. 

The head of Hamas' military wing, Mohammed Deif, was killed in an Israeli airstrike in Gaza last month, the Israeli military said on Thursday, a day after the group's political leader was assassinated in Tehran.

Spot silver added 0.7% to US$28.76 and platinum rose 0.6% at US$964.92. Both metals were headed for weekly gains.

Palladium edged 0.1% lower to US$904.39.

  - Reuters