(Updates prices, adds quote and details)
* Gold headed for biggest weekly drop in three months
* Palladium on track for first weekly gain in three
* Silver set for biggest weekly fall since early Dec
* U.S. non-farm payrolls data due at 1330 GMT
By Asha Sistla
Feb 7 (Reuters) - Gold prices were steady on Friday after two days of gains as equities lost ground, with the coronavirus that originated in China showing no signs of slowing down amid escalating fears of a broader impact on economic growth.
The metal, however, was still on track for its biggest weekly decline in three months as solid U.S. economic data, including a drop in unemployment benefits, continued to underpin the greenback. Investors now await the non-farm payrolls data due later in the day. gold XAU= was little changed at $1,566.33 per ounce, as of 0819 GMT, down about 1.5% for the week. U.S. gold futures GCv1 were unchanged at $1,569.30 per ounce.
"The focus is on whether we are going to get a strong enough economic shock (from the virus) that would get central banks to cut rates further," said Ilya Spivak, a senior currency strategist at DailyFx.
"There is an underlying anxiety and ... clearly markets are very sensitive, which is why gold doesn't want to fall because there is anticipation that no central bank is going to be raising rates in this environment for a long time."
Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of gold.
Asian shares slipped on the rising number of fatalities. The death toll in China reached 636 by the end of Thursday, up 73 from the previous day, the National Health Commission said. MKTS/GLOB
Data on Thursday showed U.S. unemployment benefits dropped to a nine-month low and worker productivity rebounded, boosting the dollar to near 4-month highs. The dollar index .DXY was on track for its best weekly gain since early November. USD/ U.S. market is going good and we are getting some positive numbers from the economic releases and because of that we have seen lacklustre trade in gold," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
Among other metals, palladium XPD= fell 0.4% to $2,336.78 an ounce. The metal, mainly used in car exhaust systems to cut back emissions, was still on track to post its first weekly gain in three.
The new Chinese auto-emissions standards will likely support the palladium market this year, despite its recent price wobble following the Wuhan virus outbreak, Capital Economics said in a note dated Feb. 6.
Silver XAG= fell 0.3% to $17.76 per ounce, set for its worst week in two months, while platinum XPT= shed 0.2% to $959.79.