The U.S. dollar gained approximately 0.5 percent against the shared currency of the European Union, which also benefited the yellowish metal as it and the monetary unit tend to perform the inverse of one another.
Gold dipped into a bear market as it drives toward notching its 12th consecutive year of annual gains. Through Thursday, gold's losses thus far this year were nearing 7 percent.
"All of the traditionally supportive reasons for buying gold don't seem to work right now," senior commodity broker Frank Cholly with RJO Futures in Chicago told Bloomberg on Friday. "The argument for gold as a safe haven or protection against inflation just isn't there. We have a risk-on market, with a lot of money pouring into equities. It doesn't look too good for gold."
At 12:44 p.m. on Friday, gold futures dropped 3.62 percent, a $55.50 dive to $1,504.93.
A contrarian perspective
Despite the losses, senior broker Kurt Pfafflin with Daniels Trading is of the belief that gold prices will bounce back.
He disagrees with the viewpoint stating U.S. economic growth is set to blossom this year, which would bolster increased real rates and eliminate the demand for the precious metal as a haven. In particular, he pointed to non-farming jobs data that was released late last week.
"Maybe it's just me but Friday's miserable NFP reading of only 88,000 jobs added versus the lowest estimate of 200,000 just doesn't seem to be the type of positive acceleration they're looking for?" he wrote on April 5. "Let me go on record to say that I stand in complete disagreement with their line of thinking."
The precious metal's losses on Friday were as much as 4 percent, according to Bloomberg.
The Wall Street Journal reports the bear market that gold has entered into, which is signified by losses of 20 percent from its recent peaks, is linked with gains to stocks, the belief that the U.S. Federal Reserve is set to close its monetary stimulus policies and control rising inflation.
Stock market figures during the past few weeks in the U.S. repeatedly have notched record highs, which is drawing the attention of investors.
"We are in an environment right now, where everyone wants to own stocks," chief investment officer Steve Shafer with Covenant Investors told The Wall Street Journal.
Friday's dive brought down the price of gold futures to its lowest since July 2011, according to Reuters. With a record price of $1,923.70 notched two months later, the precious metal on Friday slumped as low as $1,493.35 per troy ounce.
Gold presently is approximately 22 percent beneath the record price it notched in September 2011.
"The scale of the decline has been absolutely breathtaking. We tried to rally and that just didn't get anywhere," analyst Robin Bhar with Societe Generale told Reuters on Friday. "There hasn't been any downside support, it's like a knife through butter."
Cyprus, which was approved for emergency bailout aid last month while enduring the pressures of the sovereign debt crisis, is seeking additional funding to address its deep fiscal issues.
The nation is planning to sell its gold reserves as one method of raising some funds.
"The news on Cyprus' possible gold sale puts the focus back on the fact that many central banks in the developed world have been selling gold in the past few decades and they are still not so keen to hold gold as they used to be," analyst Christin Tuxen with Danske Bank told Reuters on Friday.
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