Gold prices slipped on Friday as investors booked profits, but concerns over the global economic slowdown and massive stimulus measures from major central banks kept bullion on track for a weekly gain.

Spot gold was down 0.4 per cent at $US1,724.29 per ounce by 1805 GMT, having earlier dropped more than 1 per cent. US gold futures settled down 0.6 per cent at $US1,735.60 an ounce.

For the week, bullion rose more than 2 per cent so far, after hitting its highest in more than a week on Thursday.

“We are seeing short-term profit taking here in gold,” said Tai Wong, head of base and precious metals derivatives trading at BMO.

“However, gold is holding well near highs of the move as both retail and institutional investors have been consistently buying as global balance sheets have ballooned and the outlook for the global economy remains extremely uncertain.”

The outbreak of the new coronavirus, which has infected more than 2.7 million people globally, has prompted nations to extend lockdowns to curtail its spread, while central banks have unleashed a wave of measures to limit the financial toll.

On Thursday, the US House of Representatives approved a $US484 billion coronavirus relief bill, while European Union leaders approved an immediate rescue package of about 500 billion euros.

Gold, a safe investment during times of political and financial uncertainty, tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.

Indicative of sentiment, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust , rose to a near seven-year high, while gold in euros hit an all-time peak of 1,612.39 euros per ounce.

“Gold continues to benefit from this big mix of stimulus that was seen from all over the world. Also the expectations are pretty high that we are not near the end of the stimulus (driven) trade and it is only going to intensify in coming months,” said Edward Moya, a senior market analyst at broker OANDA.

“The one thing that could derail gold’s rally is going to be a vaccine breakthrough for Covid-19.”

Among other precious metals, palladium jumped 2.2 per cent to $US2,023.79 an ounce, but was on track to post its worst week in a month.

Platinum rose 0.8 per cent to $US760.96 per ounce, but still set for its first weekly fall in three.

Silver fell 0.7 per cent to $US15.20 an ounce.