1st LD Writethru: Gold down on dollar strength

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as a stronger U.S. dollar put pressure on the precious metal.

The most active gold contract for December delivery fell 2 U.S. dollars, or 0.18 percent, to settle at 1,104.20 dollars per ounce.

Gold was put under further pressure as the U.S. Department of Labor said the initial claims rose by 16,000 to 276,000 during the week of Oct. 31.

Analysts say the claims in general are still near record lows, and that the unemployment side of the labor market remains very favorable for economic growth.

Since the weekly initial jobless claims report was in line with expectations, analysts say that the probability of a rate hike in December is higher than in recent months.

The CMEGroup's Fedwatch tool shows the implied probability at 56 percent.

Expectations were originally for a delay in the rate hike until 2016 but the Federal Reserve's policy meeting in late October left the door open for an interest rate hike before the end of 2015.

U.S. Federal Reserve Chair Janet Yellen said Wednesday that the central bank may start raising short-term interest rates at its December policy meeting as the U.S. economy is "performing well."

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 December delivery fell 7.5 cents, or 0.50 percent, to close at 14.983 dollars per ounce. Platinum for January delivery dropped 1.7 dollars, or 0.18 percent, to close at 953.10 dollars per ounce. Endit