Gold prices eased in Europe on Friday, extending the previous session's retreat from record highs, as fresh strength in equity markets and gains in the euro versus the safe-haven Swiss franc pointed to sharper appetite for risk.

Spot gold was down 0.7 percent at $1,752.31 an ounce at 1106 GMT (7:06 a.m. EDT), but is still on track for its best weekly performance in 2-1/2 years. The precious metal has risen 24 percent so far this year on a potent mix of concerns over U.S. and euro zone debt levels and economic growth.

The precious metal hit a record $1,813.79 an ounce on Thursday but slipped as investors liquidated longs after the CME Group said it was raising margins on COMEX gold futures.

"Yesterday's correction was merely a response to a hike in margin on COMEX gold futures contracts by 22 percent," said Pradeep Unni, senior analyst at Richcomm Global Services.

"The trend still is completely biased to the upside with further gains possible as we continue to get bad news from the economic front. The focus however has shifted from the United States to the euro zone."

He said retail sales data due at 1230 GMT will give gold traders a fresh signal on the health of the U.S. economy.

The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, reported its biggest one-day outflow since January 25 on Thursday, with its holdings declining by 23.6 tonnes, worth some $1.3 billion at current prices.

"Some ETF investors clearly view the recent gold's sharp price rally as exaggerated and have taken profits, as financial markets calm," said Commerzbank in a note.

OUT IN FORCE

But overall risk-averse buyers have been out in force this week, putting gold on track for its biggest one-week rise since February 2009, up 5.7 percent.

In the week ended August 10, two of the largest gold ETFs, SPDR and the iShares Gold Trust, had their fourth-biggest week of net inflows, data from Lipper showed on Thursday.

On the physical market, robust investment demand in Asia helped gold premiums in Hong Kong and Singapore remain steady.

"The gold market remains underpinned by the movement to physical gold, which has persisted all week," said UBS in a note. "European demand for small bars particularly, but also coins, remains very strong. As the week has progressed Asian physical demand, outside India, has been noticeably higher."

"We have also observed among existing and indeed new clients this week a growing preference toward allocated gold instead of metal account/unallocated gold. This is quite obvious among our wealth management and private clients, but even among the fund industry, interest in allocated gold is growing again."

"The move to real assets such as gold in physical form signifies the heightened state of risk aversion at present."

While investment remains high, relatively little gold scrap is being returned to the market, meanwhile, with much readily available metal already having been sold.

Among other precious metals, silver was down 0.9 percent at $38.31 an ounce.

The gold: silver ratio, or the number of ounces of silver needed to buy an ounce of gold, held near 46 on Friday, close to its highest since early February, as silver underperformed gold.

Meanwhile, spot platinum was up 0.4 percent at $1,789.25 an ounce, while spot palladium was flat at $737.78 an ounce.

Platinum prices edged back above those of gold after the two metals reached parity for the first time since late 2008 early this week, but gold may still regain its premium over platinum if risk aversion rises once more, lifting gold as a safe-haven and weighing on platinum as an industrial metal.

(Reporting by Jan Harvey; Editing by Alison Birrane)