Precious metals and euro dropped on Friday as European periphery worries intensified, helping safe-haven interest into the US dollar. EUR/USD touched a fresh 2-month low.

People sold off the single currency and commodities on a Financial Times article that said most of the European Union member countries are compelling Portugal to seek a bailout. Portugal, however, denied the news.

Investors asked for more premiums for keeping sovereign bonds of Spain and Portugal than what they would agree for German bunds, further dampening the sentiment for the region's common currency.

On the commodities front, fears of China raising its policy rates continued to weigh.

At 10:15 GMT, the euro was buying 1.3245 dollars, less than 1.3358 late Thursday in New York. It fell as low as 1.3216 on the day, its weakest since September 21.

At its current level, EUR/USD was down 0.85 percent on the day and 3.3 percent weaker from last week's close.

Trading was thin in forex markets on Thursday owing to a US holiday.

December delivery gold was at $1.365.2 per ounce on Comex, down from $1,373 on Thursday. Silver slipped by 408 pence to $27.12 per ounce.

Platinum for January delivery was at $1,644.1 per ounce, losing $14.3 from Thursday while December palladium dropped to $676.9 from its previous close of $695.4.