1st LD Writethru: Gold down on positive U.S. data

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Friday as better-than-expected U.S. data put pressure on the precious metal.

The most active gold contract for February delivery fell 9.9 U.S. dollars, or 0.89 percent, to settle at 1,097.90 dollars per ounce.

A report released by the U.S. Department of Labor on Friday showed the U.S. employment grew at a rate higher than many traders expected, putting pressure on the precious metal.

The report showed nonfarm payrolls increasing by 292,000 during the month of December, which was far more than expected. Analysts note that professional and business services increased by 73,000 payrolls, and that this measure often increases ahead of future hiring.

The strength in this employment report is likely to influence the thinking of the U.S. Federal Reserve during its next couple of meetings, experts say.

Analysts say the long-term trend for gold remains strongly bearish as the Fed began the first of its interest rate hikes in December, despite expectations for a delay until 2016.

Some analysts believe that the Fed may increase its key interest rate at the next Federal Open Market Committee (FOMC) meeting in March.

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.

Until the December FOMC meeting there had not been an increase in the Fed's interest rate since June 2006, before the beginning of the American financial crisis.

The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, rose by 0.28 as of 1800 GMT, weighing on gold.

Stronger U.S. equities also put pressure on the precious metal.

Silver for March delivery fell 42.6 cents, or 2.97 percent, to close at 13.918 dollars per ounce. Platinum for April delivery rose 1.2 dollars, or 0.14 percent, to close at 878.70 dollars per ounce. Endit