Gold fell on Friday on caution ahead of the weekend, but prices were set to post their biggest weekly gain since 2008 as economic damage expected from the coronavirus boosted bullion's safe-haven appeal.
Platinum and palladium were on track for their biggest weekly gains on record on supply concerns arising from a lockdown in major producer South Africa.
Spot gold fell 0.2% to $1,625.16 per ounce as of 1:36 p.m. EDT (1736 GMT). U.S. gold futures settled 1.5% lower at $1,625.80 per ounce.
"A sell-off in U.S. equities has weighed in on all asset classes again leading to a series of margin call pressure on precious metals," said Phil Streible, chief market strategist at Blue Line Futures in Chicago.
Wall Street shares fell as fears about the economic damage from the pandemic returned.
"Gold has tied itself with the equity markets," said Bob Haberkorn, senior market strategist at RJO Futures. "There are so many unknowns heading into the weekend, and though gold is a safety asset, there is just a reluctance to add risk-on."
Gold has gained more than 8% so far this week, supported by the biggest-ever jump in U.S. weekly jobless claims, and the U.S. Federal Reserve's unprecedented economic stimulus measures.
Meanwhile, the U.S. House of Representatives passed a $2.2 trillion coronavirus aid bill.
"The market is looking to assess the impact of numerous lockdowns and business closures on the economy," Standard Chartered Bank analyst Suki Cooper said in a note. "Gold prices have gained further ground in anticipation of further stimulus and weaker data to come."
"Price risks remain to the upside barring profit-taking and (we) expect prices to average $1,725 per ounce in Q2-2020," she said.
Gold market participants also kept a close eye on physical supply as virus-led lockdowns stalled supply chains.
CME Group announced the initial listing of enhanced delivery gold futures that will be deliverable in 100-ounce bars, 400-ounce bars, or kilo bars, effective April 6.
Physical gold dealers struggled to meet surging safe-haven demand this week, especially in Singapore, as the pandemic choked global supply chains, while massive discounts were offered in India amid a lockdown.
Elsewhere, palladium fell 3.2% to $2,255.81 per ounce, but has risen over 36% so far this week. Platinum rose 0.6% to $740.47, but has gained about 21% this week.
Silver fell 0.2% to $14.36, but was heading for its largest weekly gain since 2008.
(Reporting by Sumita Layek and Eileen Soreng in Bengaluru; Editing by Richard Chang and Steve Orlofsky)