1st LD Writethru: Gold down on U.S. Fed chair comments

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday as the U.S. Federal Reserve Chairwoman Janet Yellen eased investors' fears about the timing of the next interest rates.

The most active gold contract for April delivery lost 4 U.S. dollars, or 0.33 percent, to settle at 1,194.60 dollars per ounce.

The precious metal was put under pressure as Fed Chair Janet Yellen said that global economic instability could prevent the U.S. from straying from its track of strong growth, but noted that strong employment and wage gains are showing good signs for the U.S. economy.

She hinted that the increases in the Federal Reserve's interest rates would come more gradually than expected, easing investors fears and driving them away from the precious metal's safe haven properties. Analysts noted that normally a delay in the Fed's rate hike would be supportive to gold, but due to the uncertainty, this puts pressure on the precious metal, as it was seen as a positive move for U.S. equities market.

Prior to this address, the central bank hinted that it could still raise rates in March. However now that Yellen testified to Congress that the increases would be gradual, many analysts believe that the next rate hike will occur much later in the year.

Weakness in the U.S. dollar prevented the precious metal from falling further, as the U.S. Dollar Index fell by 0.07 to 95.99 as of 19:15 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Silver for March delivery fell 16.7 cents, or 1.08 percent, to close at 15.282 dollars per ounce. Platinum for April delivery shed 5.2 dollars, or 0.55 percent, to close at 934.20 dollars per ounce. Endit