1st LD Writethru: Gold up on weaker U.S. equities

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Wednesday as U.S. equities fell slightly.

The most active gold contract for April delivery added 11 U.S. dollars, or 0.89 percent, to settle at 1,241.80 dollars per ounce.

Gold was given support as the U.S. Dow Jones Industrial Average fell by 14 points, or 0.08 as of 17:30 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

The precious metal was prevented from rising further as the U.S.-based Automated Data Processing employment report showed better-than-expected numbers, which rose to a 214,000 level ahead of the big jobs report due on Friday. Analysts note that this strength would normally boost equities and put extensive pressure on gold, but the weakness in oil is putting pressure on the market on Wednesday.

Gold was given further support as the U.S. Dollar Index fell by 0.03 percent to 98.31 as of 17:30 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.

Traders are waiting for the weekly jobless claims report to be released on Thursday, along with international trade and the big jobs report to be released on Friday. Despite turmoil in the markets caused by weak oil prices, analysts note that recent data has been positive and could potentially mark a turnaround point for the U.S. economy after a weak first quarter.

Analysts believed that a delay in the U.S. Federal Reserve's rate hike remains inevitable due to economic instability. Prior to Fed Chairwoman Janet Yellen's address to the U.S. Congress on Feb. 10, the central bank hinted that it could still raise rates in March.

However, Yellen later testified to Congress that the increases would be gradual, many analysts believe that the next rate hike, from a 0.50 rate to a 0.75 rate will occur much later in the year.

Traders are wagering that, at the earliest, the Fed may raise rates from 0.50 to 0.75 during the April Federal Open Market Committee meeting. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 22 percent at the April 2016 meeting.

Silver for May delivery gained 26.6 cents, or 1.8 percent, to close at 15.022 dollars per ounce. Platinum for April delivery lost 0.5 dollars, or 0.05 percent, to close at 936.20 dollars per ounce. Enditem