Palladium extended its blistering rally to an all-time high within striking distance of $3,000 on Friday on supply concerns and bets for improving demand, while gold pulled back on strong U.S. economic data.

Palladium hit a record high of $2,925.14 per ounce and was poised for a second straight weekly gain.

It was up 0.4pc to $2,849.18 per ounce by 1:58 p.m. EDT (1758 GMT).

Many analysts expect a further run towards $3,000 as automakers ramp up purchases of the metal, worsening a supply shortage.

"We're expected to outstrip supply for multiple years out," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Both palladium and platinum are used as emissions reducing catalysts in automobiles but palladium is used more in gasoline engines.

Platinum climbed 2pc to $1,226.93 per ounce and was headed for its best week in six.

Spot gold, meanwhile, fell 0.4pc to $1,777.24 per ounce, giving up initial gains that were driven by a weaker dollar and subdued U.S. yields.

U.S. gold futures settled 0.2pc lower at $1,777.8 per ounce.

Data showed U.S. factory activity powered ahead in early April, giving a lift to Wall Street, while a rebound in new home sales exceeded expectations in March.

Although prices were lower on Friday, underlying factors such as safe-haven inflows due to the pandemic, the likelihood of rising inflation, lower interest rates for longer and supportive technicals make the case for holding gold, said Michael Matousek, head trader at U.S. Global Investors.

Silver fell 0.6pc to $26.02 per ounce.