Gold prices were set to mark a third straight weekly jump, after data showing cooling inflation cemented bets for a rate cut in the U.S., with traders looking forward to comments from Federal Reserve Chair Powell later in the day.

Spot gold rose 0.3% at $2,042.58 per ounce by 0621 GMT on Friday, and is up about 2% for the week so far. The metal rose $60 in November in its second straight monthly gain.

U.S. gold futures for February delivery also rose 0.3% to $2,062.30.

"If traders were convinced Fed cuts were coming in 2024, they're even more convinced now that PCE inflation came in softer - and that clearly benefited gold," said City Index Senior Analyst Matt Simpson.

Data on Thursday showed U.S. consumer spending rose moderately in October, while the annual increase in inflation was the smallest in more than 2-1/2 years.

Lower inflationary pressures and an easing labour market make a case for the Federal Reserve ending its interest rate hiking campaign, and boost the possibility of cuts in the months ahead, something two Fed officials also flagged this week.

Traders have advanced their bets for a rate cut by the U.S. central bank from about an 80% chance in May to a one-in-two chance in March, CME's FedWatch Tool shows.

Lower interest rates reduce the opportunity cost of holding non-interest-bearing bullion.

"However, month-end flow may have also been a factor, and seasonality tends to favour gains for gold between November and December," City Index's Simpson added.

Increasing bullion's appeal, the dollar index and 10-year Treasury yields edged lower. The dollar marked its weakest monthly performance in a year in November.

"Powell will dictate the (yellow) metal's direction today and set the trend for the rest of the year," said Hugo Pascal, a precious metals trader at InProved.

Spot silver and platinum edged up 0.1% to $25.29 and $927.44 per ounce, respectively, while palladium rose 0.4% to $1,011.65.

(Reporting by Harshit Verma in Bengaluru; Editing by Nivedita Bhattacharjee, Mrigank Dhaniwala and Varun H K)