Gold prices strengthened on Friday and are on track for their best week since early April, as weak U.S. employment figures fuelled bets of interest rates cuts by the Federal Reserve this year.

Spot gold gained 1.1% to $2,372.16 per ounce by 0925 GMT, hitting its highest in more than two weeks. Prices have risen over 3% so far in the week.

U.S. gold futures jumped 1.7% to $2,379.00.

"The (gold) price remains in a positive mood as investors continue to increase their position as they are betting that the Federal Reserve will cut interest rates by the end of the year and European central banks are doing the same," said Carlo Alberto De Casa, a market analyst at Kinesis Money.

Gold extended gains after jumping 1% on Thursday in response to the data showing the number of Americans filing new claims for unemployment benefits increased more than expected last week.

According to the CME's FedWatch Tool, traders are currently pricing in about a 69% chance of a Fed rate cut in September. Lower interest rates reduce the opportunity cost of holding non-yielding gold.

There is "considerable" uncertainty about where U.S. inflation will head in the coming months, San Francisco Federal Reserve President Mary Daly said on Thursday.

Investors are now looking forward to U.S. producer price index and consumer price index data due next week for fresh clues on the Fed's rate trajectory.

Meanwhile, Palestinian residents reported about Israeli forces bombarding the city of Rafah in the Gaza Strip on Thursday, while an Israeli official confirmed the end of indirect negotiations with Hamas.

"The next target for the gold can be seen in the region of $2,380," De Casa said.

Spot silver rose 1.3% to $28.71, platinum firmed 1.8% at $995.85 and palladium added 2.2% to $988.33. All three metals were up for the week.

(Reporting by Daksh Grover in Bengaluru; Editing by Shilpi Majumdar)