By Claudia Assis, MarketWatch SAN FRANCISCO (MarketWatch) -- Gold futures declined Friday on a rising dollar, but the misstep didn't dent the metal's weekly gain of 1%. Gold for December delivery retreated $6.60, or 0.5%, to $1,228.80 an ounce on the Comex division of the New York Mercantile Exchange. Strong gains earlier in the week guaranteed the rise, keeping investors' hopes that gold will continue to trend higher. Gold has risen in the past three weeks, including a rise of 1.6% in the previous week. The stronger dollar was reason No. 1 for Friday's slide, said Michael K. Smith, with T & K Futures and Options Inc. in Florida. Volumes were also thin, he added. Charles Nedoss, a senior market strategist at with Olympus Futures in Chicago, also saw margin calls dampening gold's prospects. "People are trying to defend their equity positions," he said. The dollar index (DXY 83.04, +0.61, +0.74%) , which compares the U.S. unit to a basket of six currencies, rose 0.7% to 83.06, moderating from steeper increases earlier. The euro slumped to its lowest level against the dollar in more than a month Friday, after a German official said the European Central Bank will likely wait till 2011 to decide whether to begin phasing out emergency lending support for euro-zone banks and other institutions. Gold closed at a seven-week high on Thursday, as initial claims for jobless benefits unexpectedly climbed and as two other indicators of economic activity underscored a slowdown in U.S. growth. All asset classes faced headwinds on Friday. Stocks traded lower and Treasury yields reached new lows as investors sought the safety of gold. Other metals followed gold, with copper, highly sensitive to downturns in economic activity and sentiment, and silver among the top losers. Silver for September delivery lost 34 cents, or 1.8%, to settle at $18 an ounce. September copper, which at times traded higher, ended in the red. The contract lost 3 cents, or 0.8%, to $3.29 a pound.

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