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1st LD Writethru: Gold falls on Yellen's remarks

Xinhua, May 23, 2015 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange dropped on Friday as U.S. Federal Reserve Chair Janet Yellen said a rate hike this year is still possible if the economy continues to improve as she expected.

The most active gold contract for June delivery fell 0.1 U.S. dollars, or 0.01 percent, to settle at 1,204.00 dollars per ounce. After two consecutive weekly gains,gold saw a weekly fall of 1.73 percent this week.

In a speech in Providence, Rhode, Yellen repeated the Fed's two criteria for raising rates: continued improvement in labor market conditions and inflaction moving back to 2 percent over the medium term. "We are not here yet," she said.

However, "if the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate," she said.

Her remarks gave a boost to the U.S. dollar, which in turn put pressure on dollar-denomiated gold.

Meanwhile, the U.S. Department of Labor said that the Consumer Price Index rose 0.1 percent in April, in line with market estimates. The index, currently at 1.8 percent, is closing in on the Fed's target of 2 percent, further strengthening expectations of the rate hike which is bearish for gold.

Silver for July delivery dropped 8.1 cents, or 0.47 percent, to close at 17.051 dollars per ounce. Platinum for July delivery fell 3.7 dollars, or 0.32 percent, to close at 1,148.60 dollars per ounce. Endite