Gold prices set for second weekly gain on Fed rate outlook

May 17 (Reuters) - Gold prices held steady on Friday and were on track for a second consecutive weekly gain, as recent U.S. economic data prompted traders to raise bets of an interest rate cut from the Federal Reserve later this year.

FUNDAMENTALS

* Spot gold held its ground at $2,377.09 per ounce, as of 0114 GMT. Bullion prices rose 0.7% so far for the week.

* U.S. gold futures edged 0.2% lower at $2,381.20.

* The dollar index was down 0.7% for the week so far, against its rivals, making gold less expensive for other currency holders.

* The number of Americans filing new claims for jobless benefits fell last week, unwinding nearly half of the jump at the start of the month, indicating that labor market conditions remain fairly tight even as job growth is cooling.

* Data this week offered the U.S. Federal Reserve good news on two fronts, but policymakers haven't openly shifted views yet about the timing of rate cuts investors are convinced will start this year.

* Lower interest rates reduce the opportunity cost of holding non-yielding gold.

* Atlanta Fed President Raphael Bostic said the April inflation report may have offered important clues about the direction of inflation, particularly a slowed rise in shelter cost.

* The International Monetary Fund views recent U.S. inflation data as "overall higher than we would like to see" and is urging the Federal Reserve to stay cautious and remain data-dependent.

* Anglo American has suspended hiring globally, as it gets plans underway to simplify itself and build value - and avert a $43 billion takeover bid by Australia's BHP Group.

* Asian markets go into the session looking to end a strong week on a positive note, and there appears to be no obvious reason why the recent upswing should reverse unless investors opt for a bout of profit taking ahead of the weekend.

* Spot silver was flat at $29.61 per ounce, platinum was up 0.4% at $1,061.80 and palladium fell 0.5% to $989.44.

DATA/EVENTS (GMT) 0200 China Urban Investment (YTD) YY April 0200 China Retail Sales YY April 0200 China Unemp Rate Urban Area April 0900 EU HICP Final MM, YY April (Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Sherry Jacob-Phillips)