PRECIOUS- Gold set for first weekly drop in nine; focus on US inflation data

Feb 28(Reuters) - Gold edged higher on Friday but was set to snap an eight-week winning streak on a stronger dollar, while investors turned their focus to a key U.S. inflation data for cues into the Federal Reserve's monetary policy trajectory. FUNDAMENTALS * Spot gold XAU= was up 0.1% at $2,879.09 an ounce, as of 0030 GMT. * Bullion is down nearly 2% for the week, its biggest weekly drop since November 25, 2024, and on track for its first weekly decline after eight consecutive gains. * U.S. gold futures GCcv1 eased 0.2% to $2,889.60. * The dollar index .DXY was set for a weekly gain of 0.6% so far, making greenback-priced gold more expensive for foreign buyers. * Trump said on Thursday that his proposed 25% tariffs on Mexican and Canadian goods will take effect March 4 along with an extra 10% duty on Chinese imports because deadly drugs are still pouring into the U.S. from those countries. * Philadelphia Federal Reserve Bank President Patrick Harker on Thursday expressed support for continuing to hold short-term U.S. borrowing costs in their current range of 4.25%-4.50. * Gold is seen as a hedge against political risks and inflation, but higher interest rates dampen the non-yielding asset's appeal. * Investors now await the Personal Consumption Expenditures (PCE) data, the Fed's preferred inflation measure, due later in the day, for further clues on the U.S. economic outlook. * Spot silver XAG= was steady at $31.25 an ounce, platinum XPT= fell 0.1% to $947.55 and palladium XPD= eased 0.4% to $915.63. DATA/EVENTS (GMT) 0700 UK Nationwide house price mm, Nationwide house price yy Feb 0745 France GDP QQ Final Q4 0745 France CPI (EU Norm) Prelim YY, CPI (EU Norm) Prelim MM Feb 0745 France CPI Prelim YY NSA, CPI Prelim MM NSA Feb 1300 Germany CPI Prelim YY, HICP Prelim YY Feb 1330 US Consumption, Adjusted MM Jan 1330 US Core PCE Price Index MM, Core PCE Price Index YY Jan 1330 US PCE Price Index MM, PCE Price Index YY Jan (Reporting by Anushree Mukherjee in Bengaluru; Editing by Rashmi Aich) ((anushree.ashishMukherjee@thomsonreuters.com;))