1st LD Writethru: Gold drops to lowest level in six weeks

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday as traders became more confident that the Greek debt crisis would be resolved.

The most active gold contract for April delivery dropped 8.4 U. S. dollars, or 0.70 percent, to settle at 1,200.20 dollars per ounce.

Traders were convinced Wednesday that the eurozone would reach a deal with the Greek government on the debt crisis before next week, according to reports. This put pressure on the price of gold as investors moved away from it as a safe haven and towards more lucrative and risky investments like equities.

The U.S. Dollar Index rose Wednesday, putting additional pressure on the price of gold. The index is a measure of the dollar against a basket of major currencies.

China market is closed for a week from Wednesday for the Lunar New Year holiday. Analysts said this removed some support for gold prices.

Traders are also waiting for the release Wednesday of the minutes from the last U.S. Central Bank meeting, for signs of interest rate rise.

However, housing starts slipped in January, by 2.0 percent after a 7.1 percent jump the month before, the Commerce Department said Wednesday. This has missed expectations of a rate of 1.07 million.

Silver for March delivery lost 11.3 cents, or 0.69 percent, to close at 16.265 dollars per ounce. Platinum for April delivery dropped 9.8 dollars, or 0.83 percent, to close at 1,167.20 dollars per ounce. Endite