1st LD Writethru: Gold up slightly despite stronger dollar

Gold futures on the COMEX division of the New York Mercantile Exchange drifted higher on Friday despite the dollar extended its rally.

The most active gold contract for April delivery rose 0.5 U.S. dollars, or 0.04 percent, to settle at 1,152.40 dollars per ounce.

Bucking the extensive pressure from the soaring dollar, the precious metal market seems reluctant to extend losses ahead of the U.S. Federal Reserve meeting next week.

The U.S. Department of Labor said on Friday that the producer price index, which measures prices that business receive for their goods and service, fell a seasonally adjusted 0.5 percent in February following a 0.8 percent decrease in January. The worse- than-expected figure also gave some support to gold.

The dollar index, a measure of the dollar against a basket of major currencies, rose by 0.99 percent to 100.25. A stronger greenback will make the dollar-denominated assets including gold more expensive for investors, hurting the bullion's appeal.

Analysts said the dollar's strength came as expectations mounted for a rate hike from the U.S. central bank, as a spate of official economic data showed the U.S. economy is gaining traction.

Silver for May delivery fell 2.2 cents, or 0.14 percent, to close at 15.494 dollars per ounce. Platinum for April delivery added 0.3 dollars, or 0.03 percent, to close at 1,115.20 dollars per ounce. Endite