Gold heads for fifth weekly gain with focus on US policy path after Fed action

• Gold well positioned for a significant gain, analyst says
• Gold hit record high of $3,707.40/oz on Wednesday
• Silver on track for a weekly gain

Sept 19 (Reuters) - Gold prices edged higher on Friday, poised for a fifth consecutive weekly gain on the back of the Federal Reserve's first rate cut of the year, as investors awaited further signals on the U.S. policy outlook.

Spot gold XAU= was up 0.3% at $3,655.81 per ounce as of 1038 GMT. Bullion is up 0.4% so far this week.

U.S. gold futures GCcv1 for December delivery rose 0.3% to $3,688.50.

The Fed cut its key interest rate by 25 basis points on Wednesday and opened the door to further easing, but tempered its message with warnings of sticky inflation, sowing doubt over the pace of future easing.

"The Fed policy outlook remains the primary driving force for bullion bugs, even as the precious metals enjoys tremendous support from central bank purchases and safe haven demand; any dips below $3,600 are bound to be short-lived," said Han Tan, chief market analyst at Nemo.money.

Non-yielding bullion, which tends to perform well in a low-interest-rate environment, hit a record high of $3,707.40 on Wednesday and has risen about 39% year-to-date.

Traders are pricing in a 92% chance of another 25-bp cut at the Fed's October meeting, according to the CME Group's FedWatch tool.

"Key thing that is driving gold prices is the continued dollar depreciation as year-to-date it has been very strong and we believe the pattern to continue," said Nitesh Shah, commodities strategist, WisdomTree.

"Gold prices are well positioned for a significant gain, and we expect this time next year gold prices to be around $4,300."

Physical gold premiums in India rose to a 10-month high this week as record prices near a festive season failed to deter investors from buying bullion in anticipation of further gains.

Elsewhere, spot silver XAG= rose 1% to $42.23 per ounce and headed for weekly gain, platinum XPT= edged up 0.1% to $1,385.90 while Palladium XPD= was down 0.1% at $1,149.68.