1st LD Writethru: Gold up on short covering

Gold futures on the COMEX division of the New York Mercantile Exchange rose Friday as the U.S. dollar showed weakness, along with short covering by traders.

The most active gold contract for February delivery rose 22.9 U.S. dollars, or 2.16 percent, to settle at 1,084.10 dollars per ounce.

For the week, gold futures added 2.64 percent, its first weekly gain since Oct. 16.

Gold was given support as the U.S. Dollar Index fell by 0.43 percent to 98.34 as of 1845 GMT, as the market continued to react to the decisions of the European Central Bank Meeting (ECB), which showed a smaller-than-expected expansion of the ECB's bond-buying stimulus plan, according to analysts.

Gold was given further support as traders stayed with short positions as the expectations rose for a rate hike at the U.S. Fed's Federal Open Market Committee (FOMC) meeting scheduled for Dec. 15-16, following a report released by the U.S. Department of Labor Friday, showing nonfarm payrolls increasing to 211,000 in November. Analysts also noted that the previous two months were revised upward by 35,000, giving further credibility to the prospect of a December rate hike.

Analysts believe that the market has now fully factored in the expected December rate hike. The CMEGroup's implied probability for that month's FOMC meeting is now at 78 percent.

Silver for March delivery added 45.1 cents, or 3.20 percent, to close at 14.528 dollars per ounce. Platinum for January delivery rose 33.1 dollars, or 3.91 percent, to close at 880.60 dollars per ounce. Endit