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Gold prices on Friday were set for their best week in seven, as the dollar and Treasury yields retreated, while traders awaited key U.S. jobs numbers due later in the day to gauge timing on when the Federal Reserve could start cutting interest rates.

FUNDAMENTALS

* Spot gold was flat at $2,053.09 per ounce by 0211 GMT. Still, the contract has climbed 1.8% so far this week, set for its best weekly gain since late-December, if gains hold.

* U.S. gold futures were flat at $2,070.30 per ounce.

* Spot gold rose nearly 1% on Thursday after data from the U.S. Labor Department showed initial jobless claims rose more than expected last week.

* A separate report showed that U.S. worker productivity grew faster than expected in the fourth quarter.

* Investor focus will shift to the U.S. non-farm payrolls data due at 1330 GMT.

* Bullion was also supported by concerns over the regional banking sector in the U.S., increasing appeal for safe-haven assets such as bullion and Treasury bonds. [MKTS/GLOB]

* Yields on benchmark 10-year Treasury notes, which are inversely related to bond prices, languished near their lowest levels seen in 2024. [US/]

* The dollar index fell 0.4% so far this week. [USD/]

* The U.S. Fed pushed back on the idea of an interest rate cut in the spring, but expressed confidence in inflation moving towards the desired 2% range, while doing away with a long-standing reference to possible further hikes.

* Money market pricing shows traders are nothing but sure about a rate cut in May, according to LSEG's interest rate probability app IRPR. [FEDWATCH]

* Lower interest rates boost non-yielding bullion's appeal.

* Spot silver fell 0.3% to $23.10 per ounce, platinum shed 0.5% to $908.55, while palladium edged 0.1% higher to $962.91.

DATA/EVENTS (GMT)

0745 France Industrial Output MM Dec

1330 US Non-Farm Payrolls Jan

1500 US Factory Orders MM Dec

1500 US U Mich Sentiment Final Dec