1st LD Writethru: Gold at 5-year-low on stronger dollar

Gold futures on the COMEX division of the New York Mercantile Exchange fell to a 5-year-low on Wednesday as the U.S. dollar strengthened.

The most active gold contract for August delivery fell 12 U.S. dollars, or 1.09 percent, to settle at 1,091.50 dollars per ounce.

The precious metal was put under pressure as the U.S. Dollar Index rose by 0.3 percent to 97.61 as of 18:09 GMT. The index is a measure of the dollar 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.

Analysts note that traders' stop-loss orders put additional pressure on the precious metal and say that gold remains under pressure due to technical reasons.

The market is continuing to price in the expectations for an increase in the U.S. Federal Reserve's interest rate according to analysts. An increase in the Fed's interest rate drives investors away from gold and towards assets with a return, as the precious metal bears no interest. Analysts originally expected interest rates to rise in June, but due to weaker-than-expected employment data, expectations were pushed back to September. There has not been an increase in the Fed's interest rate since June 2006, before the beginning of the American financial crisis.

Silver for September delivery fell 5.5 cents, or 0.37 percent, to close at 14.73 dollars per ounce. Platinum for October delivery dropped 4.4 dollars, or 0.45 percent, to close at 979.90 dollars per ounce. Endite