1st Ld-Writethru: Gold down on stronger dollar

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday as the U.S. dollar showed strength, putting pressure on the precious metal.

The most active gold contract for August delivery fell 12 dollars, or 1.05 percent, to settle at 1,131.90 U.S. dollars per ounce.

The U.S. Dollar Index rose to 97.88 as of 1800 GMT. The index is a measure of the greenback against a basket of major currencies. 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 dollar, becomes more expensive for investors.

A report released by the U.S. Department of Labor showed that the consumer price index rose 0.3 percent in June, in line with analysts' expectations. This may fuel market speculation over an expected U.S. interest rate hike. Analysts originally expected the interest rate to rise in June, but due to weaker-than-expected employment data, expectations were pushed back to September.

Gold was put under additional pressure as a report by the U.S. Census Bureau showed housing starts rising 9.8 percent in June to an annual rate of 1.174 million. This was much higher than expected, driven by strength in both apartment buildings and multi- family units.

Silver for September delivery also fell 15 cents, or 1.00 percent, to close at 14.834 dollars per ounce. Platinum for October delivery dropped 10.3 dollars, or 1.02 percent, to close at 1,001.30 dollars per ounce. Endite