By A. Ananthalakshmi
SINGAPORE (Reuters) - Gold edged lower on Friday as the market nervously awaited U.S. nonfarm payrolls data, heading for its longest weekly losing streak in over six months as equities firmed and optimism grew about the U.S. economy.
Investors in gold, which is often seen as a hedge against economic uncertainty, are eyeing the U.S. jobs report later on Friday to gauge the strength of the economy and any potential impact on the Federal Reserve's stimulus measures.
A weak report could boost gold's appeal as a safe-haven, while a strong report could prompt speculation that the Fed will lift rates earlier than previously expected.
Median forecasts are for a rise of 200,000 in payrolls.
"If payrolls fall short of the 200,000 mark, that would potentially support gold prices, though it is unlikely prices will break above $1,300," said Joyce Liu, an analyst at Phillip Futures.
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"But if it's a strong report, we will definitely see some downside and potentially break below $1,276."
Spot gold slipped 0.1 percent to $1,286.10 an ounce by 0318 GMT. The metal is down 0.6 percent for the week, on track for a third straight weekly loss. That would be its longest weekly losing stretch since August-September.
Prices were trading in a tight $3.86 range - the smallest trading band since December 25.
Liu said any support from physical demand, which could pick up at lower prices, would be offset by technical bearishness.
Physical demand has in fact weighed on prices, as buying interest from top consumer China has dropped off considerably.
Shanghai prices, which were at a premium of over $20 an ounce to spot prices at the beginning of the year, are now at a discount of about $2.
In No.2 buyer India, the central bank has indicated that it is considering removing some of the curbs on gold imports - a move that could potentially ease premiums and boost demand.
A pick-up in buying from India, which was until last year the biggest gold consumer, could provide some support to gold prices.
Among other precious metals, platinum and palladium were heading for weekly gains on supply worries.
Strikes in South African mines have forced platinum producers such as Lonmin to declare force majeure with some contractors.
Palladium supply fears are also being fuelled by geopolitical tensions in Russia, the top producer of the metal.
(Reporting by A. Ananthalakshmi; Editing by Ed Davies and Richard Pullin)