Precious metals slid from their day's highs on Friday in New York as fears that China will soon raise rates eroded the investment appeal commodities gained on good news from Europe.

The dollar rose against the single currency as investors shifted focus from Ireland's bailout possibilities to Thursday's stronger-than-expected US data which suggested economic recovery in the US has not lost traction.

At about 14:32 GMT, spot gold was at $1,347.55 per ounce, from its day's high of $1,362 and below its previous close of $1,353.45. Silver declined from its 1-week high of $27.38, touched earlier in the day, to $26.67. It was at $26.91 at close on Thursday.

Platinum fell to $1,651.24 from day's high of $1,669 and below its previous close of $1,662.5.

Palladium at the same time, remained slightly higher from Thursday's high, despite losing much of its day's gains. It was at $696.97, off a one-week high of $704.22 touched on the day, but still slightly above previous close of $694.

The US dollar, that had fallen to a 4-day low of 1.3729 against the euro early Friday strengthened to 1.3658, rallying 0.5 percent.

China on Friday raised bank's reserve requirements, reducing the lendable assets of banks by around 350 billion yuan. The move was expected in the wake of consumer price inflation hitting a 25-month high in its latest reading.

Analysts, however, do not expect the liquidity targeted policy moves to help manage the inflation menace and they widely expect the world's second largest economy to hike its policy rates soon.

A Bloomberg poll last week predicted that China would raise rates 'within weeks.'