Gold prices rose on Friday and were heading for their best month in five as worries over economic growth due to the fast-spreading coronavirus boosted appetite for safe havens.

Supply-squeezed palladium, meanwhile, was on track for its biggest monthly percentage gain since November 2016.

Spot gold was up 0.8 per cent at $US1,585.66 per ounce. The metal has gained more than 4 per cent so far this month.

US gold futures settled 0.1 per cent lower at $US1,587.90.

“Coronavirus continues to be a strong factor of support as we are seeing global growth concerns hurting other markets across the board. As a result, we’re seeing safe-haven demand drive into gold,” said David Meger, director of metals trading at High Ridge Futures.

“Gold is the quintessential safe-haven asset that money managers are viewing as an alternative for cash.”

The World Health Organization declared the epidemic a global emergency after the virus killed more than 200 people.

“At this point, it’s not something the Chinese economy can shrug off. There will be a hit to growth, the magnitude of which will be difficult to chisel out in detail for quite a while,” said Ilya Spivak, a senior currency strategist at DailyFx.

The virus fears gripped financial markets, overshadowing the latest batch of upbeat corporate earnings.

“Gold is both continuing to find favour as a traditional safe haven and, at the same time, run into strong resistance on the run-up to $US1,600, which is keeping a lid on gains,” OANDA analyst Craig Erlam said in a note.

On the physical side, however, an extended holiday in top consumer China due to the outbreak dimmed activity in Asian bullion hubs.

Auto-catalyst palladium, which is in short supply, has risen 18 per cent so far this month, having hit a record high of $US2,582.19 per ounce on January 20. On the day, palladium was down 1.2 per cent at $US2,283.19.

“Palladium prices have really been in their own world … there is lot of demand for it in a tight supplied environment. We are seeing what industrial demand can do for prices,” High Ridge Futures’ Meger said.

Silver rose 1.1 per cent to $US18.02 an ounce. Platinum dipped 1.9 per cent to $US959.33 and was on track for its worst week since early November.