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Gold prices were set to post a second consecutive weekly gain on Friday as recent softer U.S. economic data kept traders optimistic for interest rate cuts later this year, with other precious metals also heading for a weekly gain.

Spot gold was up 0.2% at $2,363.06 per ounce, as of 0953 GMT, after hitting a two-week high earlier in the session.

Bullion has gained more than 1% so far in the week, adding to the 1.7% increase last week.

U.S. gold futures rose 0.3% to $2,376.70 on the day.

"There's been some softness coming through the economic data from the U.S. this week, like yesterday's housing data pointed towards a slowdown with high interest rates having a negative impact on activity there," said Ole Hansen, head of commodity strategy at Saxo Bank.

Data on Thursday showed first-time applications for U.S. unemployment benefits fell moderately last week, while new housing construction dropped. This, along with tepid retail sales last month, keeps the chance of a September rate cut on the table.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Meanwhile, China's yuan dipped to a fresh seven-month low against the dollar.

"The soft Chinese renminbi is also one of the reasons why investors in general in China have been falling over gold in recent months, apart from obviously the worries about the property sector," Hansen said.

The market's next focus is on the U.S. flash purchasing managers' indexes due at 1345 GMT.

Spot silver fell 1.1% to $30.37 per ounce, but following gold's trajectory, it was also up 3% so far for the week.

"Wherever gold goes, silver goes, but faster," Hansen said.

Spot platinum was up 0.8% at $986.05 and palladium gained 1.5% to $937.56. Both metals were also headed for weekly gains.