Updated from 12.05 p.m. EDT with settlement prices

NEW YORK (

TheStreet

) --

Gold prices plunged Friday as Spain again failed to request a bailout and demand continued to sink in Asia.

Gold for December delivery shed $20.70 to settle at $1,724 an ounce at the Comex division of the New York Mercantile Exchange. The

gold price traded as high as $1,744.70 and as low as $1,716 an ounce, while the spot price was down $20.60, according to Kitco's gold index.

Gold fell below $1,730 an ounce, which many investors had pointed to as lower technical price resistance of the yellow metal.

"We're hearing Europe, the financial crisis; you're starting to hear that again, so the dollar strengthened a little bit. And then you're hearing OK news out of China, so that means the Chinese central bank may be delaying they're new stimulus measures," said Yu-Dee Chang, chief trader at Ace Investment Strategists.

Silver prices for December delivery closed down 77 cents to $32.10 an ounce, while the

U.S. dollar index was gaining 0.33% to $79.60.

At the second day of a two-day summit in Brussels, European leaders failed to address additional financial aid for Spain as it looked like the euro banking union would

delay further decisions until 2013

.

Italy said Friday that it would shrink the amount of debt it would issue through the remainder of 2012 after a huge sale of €18 billion of four-year BTP Italia bonds, according to

Reuters

.

China posted late Wednesday a 7.4% year-over-year increase in third-quarter gross domestic product. Further, industrial production and retail sales were both better than expected as the generally good news suggested central bank easing wouldn't be in near-term plans.

George Gero, precious metals strategist at RBC Wealth Management, noted a slowing of gold purchases in India and China as another reason for the selloff in gold ahead of the weekend.

With the open-ended, mortgage backed securities purchase program implemented by the

Federal Reserve

, the commonly held belief that Spain will eventually accept new stimulus and overall weakness in the global economy, long-term prognostications still point to a rise in gold prices.

Open interest also continued to fall during Thursday's trading session to 470,000 contracts, down from a high of 492,000, which suggested that investors wanted to take profits with the end of the year nearing.

Gold mining stocks were mixed Friday. Shares of

NovaGold Resources

(NG) - Get Report

were off 2%, while shares of

Barrick Gold

(ABX)

were sinking 0.87%.

Among other mining stocks,

Kinross Gold

(KGC) - Get Report

was down 0.44%, but

Gold Fields

(GFI) - Get Report

was rising 1.8%.

Gold ETF

SPDR Gold Trust

(GLD) - Get Report

was losing 1.2%.

-- Written by Joe Deaux in New York.

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