We present the observation and systematic study of a novel optical phenomenon, a "plasmonic halo", wherein surface plasmons optically excited on circular silver microcavities form confined drumhead modes that, under resonant conditions, emanate colorful far-field radiation from their perimeter boundaries. We demonstrate both experimentally and theoretically that such circular microcavities integrated with perimeter step gaps can generate surface plasmon cavity modes which modulate optical transmission/emission through/from the device, yielding the plasmonic halo effect. Via the tuning of geometric and/or material parameters, optical properties of this device can be manipulated in the visible range, leading to potential applications in biomedical plasmonics and discrete optical filtering, among others.