1st LD Writethru: Gold down on stronger U.S. dollar

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

The most active gold contract for December delivery fell 16.5 U.S. dollars, or 1.49 percent, to settle at 1,087.70 dollars per ounce.

The U.S. dollar soared against other major currencies Friday, pressuring gold.

Gold was put under further pressure as a report released by the U.S. Department of Labor showed a much better than expected employment report, with unemployment falling to 5 percent and payrolls rising by 271,000.

Analysts note that claims in general are still near record lows, and that the unemployment side of the labor market still remains very favorable for economic growth. They concluded the probability of a rate hike in December remains higher due to this exceptionally positive report as the CMEGroup's Fedwatch tool shows the implied probability of a December rate hike at 70 percent.

Expectations were originally for a delay in the rate hike until 2016 but the meeting of the Federal Open Market Committee in late October confirmed that the Fed wants to raise rates before the end of 2015.

Fed Chairwoman Janet Yellen said Wednesday that a December rate hike was still on the table. 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. There has not been an increase in the Fed't interest rate since June 2006, before the beginning of the American financial crisis.

Silver for December delivery fell 29.2 cents, or 1.95 percent, to close at 14.691 dollars per ounce. Platinum for January delivery dropped 13.1 dollars, or 1.37 percent, to close at 940.00 dollars per ounce. Endit