US stocks shook off an early slump to close higher on Friday, ending a positive week for the major indices on Wall Street, as gold prices hit a record high.

"We had very big moves over the past two weeks, off the low," said Adam Sarhan of 50 Park Investments. "And now we are only five percent below the all time high."

"That shows us that there is still a lot of demand for stocks at lower prices," he added.

The Dow Jones Industrial Average closed up 0.2 percent at 40,659.76, the S&P 500 finished 0.2 percent higher at 5,554.25 and the Nasdaq Composite ended the day 0.2 percent higher at 17,631.72.

Gold hit a new record on Friday as investors snapped up the precious metal amid increasing confidence that US rates will fall in September, weakening the US dollar. Rising geopolitical tensions in the Middle East also increased market appetite for safe haven investments like gold.

Traders are now looking ahead to Wednesday, when the Federal Reserve will publish the minutes of its most recent interest rate decision.

They will also be closely scrutinizing comments from Fed officials around the Jackson Hole meeting of central bankers next weekend, according to Sarhan.

"You have expectations that the Fed is going to cut, the question now becomes how many times they will cut," he said. "Nobody knows, not even the Fed. It's data dependent once again." (AFP)