Gold down on strong US dollar

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday as the U.S. dollar strengthened on weakness in the euro zone.

The most active gold contract for April delivery fell 12.6 U.S. dollars, or 1.02 percent, to settle at 1,219.60 dollars per ounce.

Dollar Spot Index, a measure of the dollar against a basket of major currencies, rose by 0.28 percent to 95.0220, putting pressure on the precious metal. Gold and the dollar typically move in opposite directions, as if the dollar goes up, gold, measured by the dollar, will become more expensive and thus less attractive for investors, which in turn dragged down gold futures.

Analysts said that strength in the dollar could potentially prompt the U.S. Federal Reserve to raise interest rates sooner than expected, putting additional pressure on the price of gold.

Other analysts believed that gold's fall was capped by uncertainty in Greece trigged by concerns that the euro zone will weaken if Greece refuses or is unable to pay off its bailout debt.

Silver for March delivery dropped 11.2 cents, or 0.66 percent, to close at 16.761 dollars per ounce. Platinum for April delivery fell 11.7 dollars, or 0.97 percent, to close at 1,195.60 dollars per ounce.