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

Xinhua, January 12, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday as the U.S. dollar showed strength.

The most active gold contract for February delivery fell 1.7 U.S. dollars, or 0.15 percent, to settle at 1,096.20 dollars per ounce.

The precious metal was put under pressure as the U.S. Dollar Index, a measure of the dollar against a basket of major currencies, rose against Euro on Monday, analysts said.

Volume was low as there were no economic reports released, and no strong expectations for a rate hike during the U.S. central bank's January Federal Open Market Committee (FOMC) meeting.

Gold's fall was curbed as poor performance in U.S. equities gave support to the precious metal. The Dow Jones Industrial Average fell by 0.04 percent on Monday as of 16:30 GMT. A retreat in U.S. equities will drive investors toward safe-haven assets, boosting the precious metal.

U.S. total nonfarm payroll employment rose by 292,000 in December, well above market estimates of 200,000, and unemployment rate was unchanged at 5.0 percent, according to the Labor Department's Friday report. Analysts said that the better-than-expected data also extended pressure on gold futures on Monday.

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

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 March delivery fell 5.2 cents, or 0.37 percent, to close at 13.866 dollars per ounce. Platinum for April delivery shed 32.4 dollars, or 3.69 percent, to close at 846.30 dollars per ounce. Endit