PRECIOUS-Gold set for weekly gain; US payrolls data awaited

By Anjana Anil and Anushree Mukherjee

March 7 (Reuters) - Gold edged higher on Friday, and was poised for a weekly rise, as the dollar weakened and uncertainty around U.S. President Donald Trump's tariff plans firmed demand, while investors awaited U.S. non-farm payrolls data due later in the day.

Spot gold XAU= gained 0.2% to $2,916.88 an ounce as of 0800 GMT. Bullion has added more than 2% this week.

U.S. gold futures GCcv1 lost 0.3% to $2,918.80.

"Markets are waiting for fresh triggers regarding what is likely to happen going forward with respect to the trade war... The outlook (for gold) continues to remain very optimistic," said Kunal Shah, head of research, Nirmal Bang Commodities, Mumbai.

Trump on Thursday suspended the 25% tariffs imposed this week on most goods from Canada and Mexico, the latest twist in a fluctuating trade policy that has whipsawed financial markets and fanned fears of inflation and a growth slowdown.

The ongoing trade tensions, inflation uncertainty and a weaker dollar signalling a slowing economy are all bullish for gold, Shah said.

The U.S. dollar index .DXY was hovering near a four-month low and was headed for its worst weekly fall since November 2022.

Trump's policies, widely seen as likely to stoke economic uncertainties, have helped safe-haven gold rise over 10% year-to-date.

Federal Reserve Governor Christopher Waller said he leans strongly against a rate cut at the Fed's upcoming policy meeting this month, although he reckons cuts later in the year remain on track if inflation pressures continue to abate.

Bullion is considered a hedge against political risks and inflation, but higher interest rates dampen the non-yielding asset's appeal.

Spotlight is on the non-farm payrolls report due at 1330 GMT, which is expected to show a gain of 160,000 jobs in February, a Reuters survey showed.

Spot silver XAG= eased 0.1% to $32.60 an ounce. Platinum XPT= added 0.7% to $972.85 and palladium XPD= gained 0.5% to $946.75.