Gold prices were set for their best week since April, supported by safe-haven demand and expectations that the Federal Reserve would start cutting interest rates in September, with markets awaiting a key jobs report for further cues.

Spot gold was up 0.7% at $2,463.46 per ounce as of 1105 GMT on Friday, just $20 shy of the record peak of $2,483.60 scaled on July 17. Bullion has gained 3.2% so far this week.

U.S. gold futures climbed 1.1% to $2,508.00.

"Gold prices are buoyed by rising expectations of rate cuts, driven by recent weak U.S. economic data... additionally, fears of a retaliatory strike by Iran and its proxies in the Middle East are bolstering gold's appeal as a safe haven," said Zain Vawda, market analyst at MarketPulse by OANDA.

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

Investors will now monitor the U.S. payrolls report due at 1230 GMT, for further clarity on the Fed's policy path.

Year-end target of $2,500 could be reached sooner if U.S. data weakness continues, said Ole Hansen, head of commodity strategy at Saxo Bank.

Speculation of Fed rate cuts, geopolitical tensions, rising debt concerns, and renewed demand from central banks and ETF investors who will see the lower funding costs as a reason to accumulate gold again could also help the growth, Hansen added.

Fed Chair Jerome Powell said on Wednesday that rates could be cut as soon as September if the U.S. economy follows its expected path.

UBS expects gold purchases by central banks to remain robust, given their desire to diversify out of the U.S. dollar.

"Central bank purchases should be around 1,000 tons this year, which is double the usual amount," they said in a note.

Spot silver added 1.5% to $28.97 per ounce, platinum rose 1.4% to $969.52 and palladium gained 0.6% to $910.25. All three metals were headed for weekly gains.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Shailesh Kuber and Varun H K)