Aug 16 (Reuters) - Gold prices edged up on Friday and were set for a weekly gain on growing optimism about a September U.S. rate cut, although expectations the Federal Reserve will ease aggressively have been tempered ahead of Chair Jerome Powell's upcoming speech.
Spot gold was up 0.3% at 2,462.82 per ounce, as of 1002 GMT and has gained more than 1% so far this week. U.S. gold futures rose 0.3% to $2,500.50.
"Gold traders are proceeding with caution this week because U.S. data has greatly lowered the chances of a 50 bps interest rate cut in September," said Zain Vawda, market analyst at MarketPulse by OANDA.
U.S. inflation data indicates that gold may need additional catalysts to surpass $2,500, while this level could eventually be reached, it's unlikely in the near term, with gold expected to remain within the $2,360 to $2,480 range, Vawda added.
Recent data restored confidence that had been shaken by a surprisingly weak employment report earlier this month. It also bolstered optimism regarding improving inflation, as evidenced by the July releases of the producer price index and consumer price index this week.
Traders are convinced the Fed will slash rates on Sept. 18, but had debated the size of the reduction. Odds currently stand at 25% for a 50 basis-point cut, down from 36% a day earlier, according to the CME Group's FedWatch Tool.
A low interest rate environment tends to boost non-yielding bullion's appeal.
Minutes of the Fed's July policy meeting are due on Wednesday and Powell will speak on the U.S. economic outlook next Friday at the Jackson Hole symposium.
Elsewhere, spot silver fell 0.6% to $28.22 per ounce, and platinum dipped 0.2% to $951.05 after gaining as much as 4% to hit a two-week high on Thursday. Palladium shed 0.6% to $941.19.
All metals were on track for weekly gains.
Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Emelia Sithole-Matarise
