Spot gold was steady on Friday, but was likely to register its first weekly drop after seven straight weeks of gains as investors awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke later in the day.

All eyes are on Bernanke's speech in Jackson Hole scheduled for 1400 GMT, with markets eager to hear what the Fed's plan is to help a struggling U.S. economy, although the growing consensus is that the Fed's options to stimulate the economy are limited.

Spot gold gained 0.3 percent to $1,774.20 by 0703 GMT after a 1.1 percent rise on Thursday. It was on course for a 4.3-percent decline on the week, its sharpest weekly fall since week ended May 8.

U.S. gold gained 0.8 percent to $1,776.70.

There is still good physical demand, and good buying from the Shanghai markets, said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

The dip in the previous session to a 2-1/2-week low of$1,702.44 triggered buying interest, but the upside is capped at $1,800 as investors remained cautious ahead of the Bernanke speech, Fung added.

The most-active Shanghai gold futures contract closed at 367.80 yuan per gram, or $1,787.28, at a premium of about $13 over spot prices.

Technical analysis showed that gold is likely to consolidate between $1,702 and $1,774 for the next few days before resuming the rally, said Reuters market analyst Wang Tao.

Gold lost more than $200 over the past three sessions after it hit a record high above $1,911 on Tuesday.

We believe this is a healthy correction for the market, and barring further near term weakness, the longer-term uptrend remains intact given the macro backdrop, said Barclays Capital in a research note.

A number of banks have recently raised their gold price forecast.

Holdings in the SPDR Gold Trust remained unchanged at 1,232.314 tonnes, while holdings in the iShares Silver Trust dropped more than 1 percent to 9,705.90 tonnes.

Freeport McMoRan Copper & Gold's Indonesian workers plan to stage another strike at its huge Grasberg mine in coming days after talks with the management stalled.

Production disruption could potentially add to the supportive factors in the gold market, including low interest rates, fear of another recession and strong physical demand.

Spot silver lost 1.3 percent to $40.45 an ounce, but was still up from a 1-1/2 week low of $38.73 hit in the previous session. It was headed for a 6 percent weekly drop, its worst week since early May.

Spot platinum edged up 0.3 percent to $1,816.74 an ounce.

Japanese investors have been steadily boosting their platinum investments over the last month, tempted by the precious metal's stability relative to gold as they look to diversify their commodity holdings with global markets in turmoil.

Gold Federal reserve Copper Ben Bernanke