PRECIOUS-Gold inches up; headed for 2nd week of losses

* Gold ETF holdings hit record high

* Spot gold breaches 100-day moving average

* Coming up: U.S. non-farm payrolls data, Nov; 1330 GMT

(Adds details, comments; updates prices) SINGAPORE, Dec 7 (Reuters) - Gold nudged higher on Friday, extending gains from the previous session when bullion was boosted by prospects of future interest cuts by the European Central Bank, but the precious metal was headed for its second straight week of decline. The euro zone economy is likely to further shrink in 2013, the European Central Bank predicted on Thursday, fanning expectations that the bank may cut rates next year in the face of another contraction in the economy. Monetary easing from central banks has been a key factor driving gold's nearly 9-percent rise this year. Investors flee to gold when they fear the value of fiat currencies is threatened by rampant cash printing by central banks. Investors are watching the progress in the talks in Washington on how to avoid an imminent fiscal calamity, as the deadline to avert the $600 billion tax hikes and spending cuts, known as the "fiscal cliff", looms large.

Though gold fell to a one-month low earlier this week, investors remained confident in the outlook of the precious metal, as they piled into gold-backed exchange-traded funds, whose holdings hit a record high for a second consecutive day.

"Gold's fundamentals are intact," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen. "Investors seem to regard $1,690 as an attractive level to buy gold." On the chart, spot gold breached the 100-day moving average, which had been a support level until earlier week. The moving average stood just above $1,701 an ounce. Spot gold gained 0.3 percent to $1,703.04 an ounce by 0323 GMT, on course for a 0.8-percent loss for the week in its second weekly drop. U.S. gold was little changed at $1,703.20. As prices rebounded, the physical buying that had emerged in the past few days when prices fell below $1,700 dried up. "People want to minimise their stockpiles before the year end," said Ronald Leung, a dealer at Lee Cheong Gold Dealers in Hong Kong, adding that premiums were about 70 cents to $1.20 an ounce above London prices. He warned of a spike in premiums around the year end when refineries outside Asia close for holidays. On the macro front, investors will watch the U.S. non-farm payrolls data, due at 1330 GMT, expecting it to show a sharp drop in job growth in November as superstorm Sandy disrupted economic activity. The unemployment rate is seen holding steady at 7.9 percent. The figures follows Thursday's data showing the number of Americans filing for jobless claims last week fell to a pre-Sandy range, suggesting a return to a modest job growth after a storm-related set back. Spot palladium inched down 0.1 percent to $689.10, headed for a 1.3-percent weekly rise in its sixth week of straight gains, its longest winning streak in nearly two years.

Precious metals prices 0323 GMT

Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1703.04 4.42 +0.26 8.90 Spot Silver 33.09 0.11 +0.33 19.50 Spot Platinum 1597.99 5.49 +0.34 14.72 Spot Palladium 689.10 -0.90 -0.13 5.61 COMEX GOLD DEC2 1703.20 1.40 +0.08 8.71 5979 COMEX SILVER MAR3 33.17 0.06 +0.17 18.83 1640 Euro/Dollar 1.2968 Dollar/Yen 82.47

COMEX gold and silver contracts show the most active months

(Editing by Miral Fahmy)