1st LD Writethru: Gold up ahead of Federal Reserve meeting

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday ahead of the U. S. Federal Reserve's Federal Open Market Committee meeting.

The most active gold contract for August delivery rose 10.9 U.S. dollars, or 1 percent, to settle at 1,096.40 dollars per ounce.

The precious metal was given support ahead of the FOMC meeting despite analysts saying that the Federal Reserve is unlikely to change its opinion since the recent policy statement or Fed Chair Janet Yellen's congressional testimony this month.

The meeting is scheduled for Tuesday and Wednesday, ending with a press conference on Wednesday afternoon in New York. 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.

Gold was also given support as the U.S. Dollar Index also fell by 0.85 percent to 96.43. 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.

Silver for September delivery rose 11.7 cents, or 0.81 percent, to close at 14.605 dollars per ounce. Platinum for October delivery added 8.2 dollars, or 0.84 percent, to close at 988.90 dollars per ounce. Endite