Gold futures on the COMEX Division of the New York Mercantile Exchange retreated on Friday as escalating concerns over sovereign-debt levels in the euro zone pushed dollar much higher, which attracted safe-haven buyer away from the bullion. Silver and platinum both slumped.
The most active gold contract for December delivery lost 10.6 U. S. dollars, or 0.8 percent, to 1,362.4 dollars per ounce.
Euro slumped to two-month low against dollar Friday on reports that Portugal is under heavy pressure to require financial aid to ease its debt and deficit problems.
"The European Union's fragility coupled with the tension between North and South Korea have kept traders and investors alike scrambling to get on the right side of the market," said Mike Daly, a gold specialist with PFG BEST in Chicago.
Gold typically benefits from rising geopolitical tensions in the Korea Peninsula, but the greenback dollar tended to outshine gold as an safe-haven on Friday as renewed concerns on Eurozone financial stability spurred investors to return to dollar.
The strong rally in dollar made dollar-denominated bullion more pricey to investors and traders holding other currencies, eroding gold's appeal as an alternative investment asset, as investor favored dollar as a hedge amid currency volatility.
Silver futures for December delivery slumped 82.9 cents, or 3 percent, to 26.699 dollars per ounce. January platinum lost 13.2 dollars, or 0.8 percent, to 1,645.2 dollars per ounce.
