Gold prices rose on Friday as investors positioned themselves for Federal Reserve Chair Jerome Powell's speech that could shed light on a potential U.S. September interest rate cut, but were still set for a weekly loss.

Spot gold rose 0.6% to $2,497.19 per ounce by 1014 GMT, but was off a record high of $2,531.60 hit on Tuesday. U.S. gold futures gained 0.6% to $2,532.80.

Bullion fell more than 1% in the previous session, setting it on course for a 0.3% weekly decline, pressured by a rebound in the dollar and higher Treasury yields.

"I think it's position-taking ahead of the expected rate cut, which I think is now looking like almost a certainty in September," said independent analyst Ross Norman.

Fed policymakers on Thursday lined up in support of rate cuts starting next month now that inflation is well down from its highs and the U.S. labor market is cooling.

Traders are expecting a 74% chance of a 25 basis points cut in September, while 26% expect a deeper 50 bps cut. Gold tends to thrive in a low interest rate environment as it yields no interest by itself.

"If Powell now hints at stronger interest rate cuts as a result, we could see new record highs for gold," Commerzbank said in a note.

Powell is expected to deliver speech at the annual central banking conference in Jackson Hole, Wyoming at 1400 GMT.

On the physical demand side, a rally in gold prices stifled the metal's appeal in major Asian hubs this week, with dealers offering deeper discounts to charm buyers.

Meanwhile, spot silver rose nearly 1.4% to $29.39 per ounce and was up 1.3% for the week.

Platinum gained 0.5% to $948.10 and palladium inched up 0.2% at $934.83. Both metals were on track for a weekly decline.

(Reporting by Rahul Paswan in Bengaluru; Editing by Varun H K)