* U.S. non-farm payrolls data due at 1230 GMT
* Gold on track for seventh straight week of gains
* Palladium set to post fifth weekly rise
By Swati Verma
July 5 (Reuters) - Gold prices edged lower on Friday as the dollar gained before the release of U.S. jobs data, which could offer guidance on the U.S. Federal Reserve's upcoming interest rate decisions.
Spot gold XAU= was down 0.3% at $1,411.51 per ounce as of 1156 GMT. U.S. gold futures GCcv1 slipped 0.5% to $1,414.30 an ounce.
"The gold market still has to adjust to the rapid rally we saw at the beginning of the week when prices shot back above $1,400 per ounce, which in my view was driven by more positive sentiment in the gold market rather than any fundamental developments," said Julius Baer analyst Carsten Menke.
"At the moment, we see the dollar a tad stronger and the euro weak, which usually holds gold back. The readiness to push prices higher by speculators is also pretty limited."
The dollar index .DXY against a basket of six major currencies gained 0.2%, making gold more expensive for holders of other currencies. FRX/
Despite a slight decline on Friday, the metal is still up 0.2% so far this week, set for a seventh straight week of gains.
Investors are now waiting for the U.S. labor market non-farm payrolls data due at 1230 GMT, which are expected to have jumped by 160,000 in June compared with a 75,000 increase in May. positive surprise clearly would be negative for gold, as it would put in question the necessity of a rate cut by the Fed, which the market has priced in already and had been benefiting gold," Menke added.
Gold prices climbed to a six-year high of $1,438.63 an ounce last week, driven by expectations of rate cuts by major central banks and fears of a slowdown in the global economy.
Lower interest rates tend to support the buying of non-interest-paying bullion, which is often seen as an alternative investment during times of political and financial uncertainty.
"The main trend remains bullish as prices are holding well above the key support level of $1,380 and the psychological threshold of $1,400," Carlo Alberto De Casa, chief analyst with ActivTrades, wrote in a note.
"Any slowdown in the U.S. economy which could make the Fed take a more dovish turn could be a supportive element for bullion."
Meanwhile, India, the world's second-biggest bullion consumer, raised import duties on gold and other precious metals to 12.5% from 10%, something that could boost the incentive for smuggling. XAG= fell 0.3% to $15.23 per ounce, while platinum XPT= edged 0.2% lower to $831.12.
Palladium XPD= was steady at $1,562.67 an ounce, but was still heading for a fifth straight weekly gain.