Gold pared gains after rising to record highs on Thursday, as investors took profits from a brief rally driven by revived jitters over the eurozone sovereign debt crisis amid political instability in Portugal ahead of an EU summit.
Bullion retreated after hitting an all-time high $1,447.40 an ounce, and silver also pulled back from 31-year peaks. The metals were initially underpinned by concerns over the health of the bloc, violence in the Middle East and North Africa, and fears over inflation.
"Gold's rally was not a huge percentage move at all. It's just quiet appreciation across the board," said Dennis Gartman, publisher of the Gartman Letter, a daily investment newsletter.
Spot gold dropped 0.2 percent to $1,433.45 an ounce by 1:28 pm EDT (1728 GMT). Prior to Thursday's pullback, bullion has gained about 4 percent during a six-session winning streak.
US gold futures for April delivery fell 0.2 percent to $1,435.10.
COMEX gold was one of the most actively trading commodity markets with volume above 180,000 contracts, already the highest in more than a week.
Silver gained a penny to $37.37 an ounce, having earlier rose to a 31-year high of $38.13.
"The gold price is currently supported by safe-haven demand, stemming from three current crises - Libya and more generally unrest in the Middle East/North Africa region, Japan and renewed concerns over the periphery of Europe, particularly Ireland and Portugal," said BNP Paribas analyst Anne-Laure Tremblay.
Commodity fund managers said that precious metals are also supported by Wednesday's disappointing new home sales data, which could lead to an extension of the Fed's $600 billion bond buying program - dubbed QE2 because it is the second round of quantitative easing - before it is scheduled to end in June.
Platinum rose 0.1 percent to $1,753.49 an ounce, while palladium gained 0.6 percent to $750.47.
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