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Gold's five-session record surge, which set the metal on track for its third straight weekly rise, came to a halt on Friday as market focus shifted to the U.S. non-farm payrolls data that could offer more clues on the Federal Reserve's monetary policy trajectory.

Spot gold was down 0.5% at $2,278.50 per ounce, as of 0328 GMT, after hitting a record high of $2,305.04 on Thursday. U.S. gold futures lost 0.5% to $2,296.90.

"Gold will continue to rally with normal pull-backs," Luca Santos, an analyst at ACY Securities said.

The U.S. dollar's decline, investor expectations that the Fed will cut rates this year, economic uncertainty and rising tensions in the Middle East have been a driving force for the markets and much more for gold, Santos added. [USD/] [US/]

Bullion was on track for a third straight weekly gain, up 2.3% so far, also driven by strong central bank buying and demand from momentum-following funds.

"Gold trades in overbought territory," InProved's precious metals trader Hugo Pascal said, adding that he sees a high probability of a correction in the coming days, with $2,250 as the first target.

Focus now shifts to U.S. March non-farm payrolls (NFP) data due at 1230 GMT which could shed more light on the timing of the Fed's first rate cut.

"A stronger NFP will put pressure on the metal complex, indicating rising inflationary pressures," Pascal said.

Fed Chair Jerome Powell has reiterated that the U.S. central bank has time to deliberate over its first rate cut, given the strength of the economy and recent high inflation readings.

Traders are currently pricing in about 65% chance that the Fed will cut rates in June, according to the CME FedWatch tool. Lower interest rates reduce the opportunity cost of holding bullion.

Elsewhere, spot silver fell 1.7% to $26.49 per ounce, after hitting its highest since June 2021 in the previous session. Platinum eased 0.4% at $921.66. Both the metals were on track for a weekly rise.

Palladium lost 1.9% at $1,002.03.