Gold prices firmed on Friday and were set for a weekly gain, driven by prospects of a Fed rate cut in September and rising tensions in the Middle East, while market participants awaited US nonfarm payrolls data for further direction.

Spot gold was up 0.2% at $2,451.07 per ounce, as of 0243 GMT, and has gained more than 2% for the week.

US gold futures climbed 0.6% to $2,495.60. Investors will keep a tab on the US payrolls report due at 1230 GMT for further cues on the monetary policy path.

Federal Reserve Chair Jerome Powell said on Wednesday that interest rates could be cut as soon as September if the US economy follows its expected path.

Trader bets for a super-sized 50-basis-point (bp) rate cut in September jumped to 28.5% from 11.8% earlier this week, according to the CME Group’s FedWatch tool.

“Gold prices can breach the $2,500 mark if we see further flare-up in geopolitical tensions and a weaker jobs report raises bets for a 50 bp cut in September,” said Ajay Kedia, director at Kedia Commodities, Mumbai.

“If prices breach the $2,520 level, then the next technical target is $2,570.” Bullion is considered as a hedge against geopolitical and economic risks.

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

On the geopolitical front, the head of Hamas’ military wing, Mohammed Deif, was killed in an Israeli airstrike in Gaza last month, the Israeli military said on Thursday, a day after the group’s political leader was assassinated in Tehran.

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“Angst surrounding US elections and the conflict in the Middle East will play an assisting role in moving gold higher on a sustained basis,” analysts at TD Securities said in a note.

Spot silver added 0.2% to $28.60 per ounce and platinum rose 0.4% at $962.09. Both the metals were headed for weekly gains.

Palladium edged 0.7% lower to $899.15.