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 showed strength.

The most active gold contract for August delivery lost 0.2 U.S. dollars, or 0.02 percent, to settle at 1,096.20 dollars per ounce.

Gold was put under pressure as the U.S. Dollar Index rose by 0. 13 percent to 96.66 as of 18:08 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.

The dollar is increasing as the U.S. Federal Reserve's Open Market Committee meets on Tuesday, and plans for a press conference on Wednesday to announce the results of its meeting. Investors have been awaiting news from the U.S. central bank on when interest rates will be increased. 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. 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.

Silver for September delivery rose 3.7 cents, or 0.25 percent, to close at 14.642 dollars per ounce. Platinum for October delivery fell 2.5 dollars, or 0.25 percent, to close at 986.40 dollars per ounce. Endite