1st LD Writethru: Gold down on strong dollar, Fed rate hike fears

Gold futures on the COMEX division of the New York Mercantile Exchange closed lower on Tuesday as the U.S. dollar index hit multi-year highs amid rate hike worries.

The most active gold contract for April delivery lost 6.4 U.S. dollars, or 0.55 percent, to settle at 1,160.10 dollars per ounce.

Gold futures came under pressure after the U.S. dollar index, a measure of the dollar against six major currencies, jumped by almost 1 percent to 98.60 in the early session of Tuesday. Gold and the dollar typically move in opposite directions, as a stronger greenback makes dollar-denominated assets including gold more expensive for investors, decreasing the appeal of bullion.

The dollar has been soaring as the U.S. Federal Reserve appears to be edging closer to tightening stimulus measures, while other major central banks keep loosening monetary policy in place.

Meanwhile, as the European Central Bank began its 60 billion euros per month bond buying program on Monday, Dallas Fed President Richard Fisher suggested that the U.S. central bank should begin to increase interest rates as slack in the labor market tightens.

Some analysts believed that the lack of inflation across the globe and the strength in the dollar, among other factors, mean the potential gains for the metal could be short-lived.

Silver for May delivery fell 14.3 cents, or 0.91 percent, to close at 15.633 dollars per ounce. Platinum for April delivery dropped 18.6 dollars, or 1.62 percent, to close at 1,130 dollars per ounce. Endite