1st LD Writethru: Gold down on stronger dollar

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday as the U.S. dollar strengthened.

The most active gold contract for August delivery fell 4.9 U.S. dollars, or 0.41 percent, to settle at 1,180.90 dollars per ounce.

The precious metal was under pressure as the U.S. Dollar Index, a measure of the dollar against a basket of major currencies, rose by 0.16 percent to 94.99 as of 1829 GMT. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the greenback, becomes more expensive for investors.

A much better-than-expected economic data also weighed on market sentiment.

U.S. housing starts fell in May after a sharp increase in the previous month, but permits for future construction surged to a near eight-year high which analysts say signals the pullback was temporary and pointed to underlying strength in the housing sector.

Investors are closely watching the Federal Open Market Committee as it kicks off its two-day policy meeting on Tuesday. While the Fed is unlikely to raise interest rates at this meeting, investors will still follow closely the U.S. central bank's statement due out on Wednesday and Fed Chair Janet Yellen's news conference for clues on the timing of a possible rate hike.

Analysts originally believed that interest rates could rise as early as June, but due to worse-than-expected jobs data in March, economists are now predicting the Fed would hike rates for the first time in nearly a decade in September.

Silver for July delivery fell 11.8 cents, or 0.73 percent, to close at 15.965 dollars per ounce. Platinum for July delivery dropped 8.8 dollars, or 0.81 percent, to close at 1,079.80 dollars per ounce. Endite