Gold hovered near record levels on Friday and was on track for a weekly gain after the U.S. Federal Reserve's recent oversized interest rate reduction and on signs that further cuts were on the horizon.

Gold futures climbed to a fresh record high Thursday a day after the Federal Reserve launched its monetary easing cycle with a 50 basis points interest rate cut, which is seen as bullish for gold since lower borrowing costs benefit the metal,

Gold prices increased by 1.2 per cent to to a record high of $2,600.16 in response to the US Federal Reserve's an 50-basis point interest rate cut on Wednesday, with bullion expected to remain on an upward trajectory.

Gold witnessed a rise to a fresh record above $2,600 an ounce after the US Federal Reserve reduced its benchmark interest rate by a half percentage point. The US Fed move is being seen as an aggressive start to a policy shift aimed at bolstering the US labour market.