Gold fell almost 1 percent Friday for its biggest one-day decline in a month, as a dollar rally coupled with losses in crude oil and commodities prompted investors to sell ahead of the weekend.
Bullion also came under liquidation pressure as Wall Street resumed its slide following weaker Chinese trade data, and the euro tumbled more than 1 percent as fears over Greece's debt returned to the forefront.
"Precious metals are being lumped into the commodity basket today. There is risk-off selling, and anything in the commodities complex is getting clobbered," said Mark Luschini, chief investment strategist at financial services firm Janney Montgomery Scott, which manages $54 billion in assets.
Spot gold fell to a one-week low at $1,525.74 an ounce and was down 0.7 percent at $1,532.14 by 2:35 p.m. EDT (1835 GMT).
The metal was down 0.5 percent for the week, poised to snap a three-week winning streak. Despite Friday's loss, the metal is up 5 percent in the past five weeks on a string of bleak U.S. economic data including a weak jobs report last week.
U.S. gold futures for August delivery settled down $13.50 at $1,529.20, after trading between $1,526.70 and $1,546.50.
COMEX gold futures volume was around 125,000 lots, the highest this week but 40 percent below its 30-day average. Volume has been lackluster since last week, with bullion prices largely rangebound.
Analysts said gold could extend its slide if prices fell below key support at its 20-day moving average of $1,524, a level it has held for the past three weeks.
Sterling-priced gold, meanwhile, rose to a record 951.78 pounds an ounce as the underlying price of the precious metal remained supported while sterling fell after disappointing UK industrial output data.
Talk of large-scale, official-sector selling of gold earlier in the session, which proved unfounded, accelerated the drop in the yellow metal, traders said.
Silver slid 3.2 percent to $36.32 an ounce, sending the gold/silver ratio -- the number of silver ounces needed to buy an ounce of gold -- to above 42. Since May, it has steadied between 40 and 45 after hitting 28-year lows below 32 in April.
WEAK ECONOMIC DATA IN FOCUS
China's appetite for overseas copper supplies remained sickly and iron ore buying showed signs of ending a strong run, and that weighed heavily on equities and commodities across the board, Janney's Luschini said.
"In the shorter term, the weaker economic numbers set up liquidation of assets, even as it is bullish longer-term because the (U.S.) government is expected to do more stimulus," said Frank McGhee, head precious metals trader at Integrated Brokerage Services.
Support from inflation concerns after U.S. import prices rose for an eighth straight month in May was offset by a lackluster performance in the S&P and a $3 drop in U.S. crude futures after top exporter Saudi Arabia said it was offering more oil to Asian customers.
While gold is on the defensive, persistently low interest rates, concerns over euro zone debt and a weak outlook for the U.S. economy count in its favor longer-term, analysts said.
The end of a $600 billion U.S. government bond-buying program, or the second round of quantitative easing, this month is also fueling economic worries.
The flood of Federal Reserve money that has supported Wall Street and the rest of the U.S. economy for 2-1/2 years will shrink to a trickle with the conclusion of the Fed's bond purchases Friday.
Platinum group metals fell with the commodities complex. The metals, chiefly used in autocatalysts, are expected to firm this year as car sales improve, but prices will be sensitive to signs the auto industry is continuing to struggle.
Platinum was down 0.6 percent at $1,825.99 an ounce, while palladium slipped 0.1 percent to $812.47.