1st LD Writethru: Gold down on positive U.S. PPI data

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday as positive U.S. producer price data increased odd for the Federal Reserve to raise interest rates, putting pressure on the precious metal.

The most active gold contract for August delivery fell 1.2 U.S. dollars, or 0.10 percent, to settle at 1,179.20 dollars per ounce.

Investors are looking to economic data for clues on the timing of an increase in the U.S. interest rate, ahead of the Fed meeting next week.

The U.S. Department of Labor said on Friday that the Producer Price Index (PPI) rose a seasonally adjusted 0.5 percent in May, in line with market consensus. The year-on-year reading is at negative 1.1 percent and the core reading is at positive 0.1 percent.

A spate of strong economic data, including retail sales data released Thursday and nonfarm payrolls out last week, showed the U. S. economy is on a better footing, compared with lackluster performance in the first quarter.

The Fed will conclude a two-day meeting on Wednesday with a statement on monetary policy. Investors expected to get more signs on the timing of the rate hike. Previous, the worse-than-expected jobs data in March doused market expectation of a rate hike as early as June.

Silver for July delivery fell 13.5 cents, or 0.85 percent, to close at 15.825 dollars per ounce. Platinum for July delivery dropped 8.4 dollars, or 0.76 percent, to close at 1,096.80 dollars per ounce. Endite