Gold further retreated below the $US1250 per ounce level on Friday as the US dollar continued its ascent against major currencies and traders eased down on their frantic support for the precious metal as the week wore on, pushing down spot prices from Thursday's closing level of $US1248.27 per ounce to $1245.85 for the week's closing.

However, analysts said that the gold sale facilitated by the International Monetary Fund (IMF) to Bangladesh on Thursday pitched some form of support to the weak showing of the precious metal as the week drew to a close with the December deliveries settling at $US1246.50 per ounce, the lowest level seen in the week, on the Comex division of the New York Mercantile Exchange.

Gold bullion registered a high of $1262 at the start of the week though investors eventually shifted their focus from the safe asset as the US dollar sustained it good showing last week by trouncing the yen on Friday on the heels of raised import August import numbers from China that fuelled global economic optimism.

Also, analysts said that gold traders have started turning down on their buying activities for the precious metal in anticipation for the annual sale of European Central Bank's 500 tonnes of gold in September though they added that the IMF gold sale by the latter part of the week pointed to indications that central banks were still pinning their hopes on gold.

Most likely, gold would hover from $US1225 per ounce to $US1245 per ounce in the coming weeks as analysts noted that demand wasn't genuinely picking up with the SPDR Gold Trust holdings, the world's biggest gold-backed exchange-traded fund, dipping to 1293.531 tonnes in September 9 following the high of 1320.436 tonnes its posted in late June.

The market also saw a marked decline of 23.5 percent in the second quarter of gold jewellery sales in Italy as the other precious metals being traded in New York almost immediately followed suit with the Comex December silver sliding by 0.05 percent while the Nymex October platinum and December palladium plunged by 0.7 percent and 0.4 percent respectively on the exchange as the week closed.