Chicago, Dec 11 (IANS): Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as the US dollar strengthened ahead of the meeting of the US Federal Reserve next week.

The most active gold contract for February delivery lost $4.5 (0.42 percent) to settle at $1,072 per ounce, Xinhua reported.

Gold was put under pressure as the US Dollar Index rose by 0.52 to 97.91. 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 holding other currencies.

The precious metal was prevented from falling further as the weekly jobless claims report released by the US Department of Labour on Thursday showed the country's initial claims increased by 13,000 to 282,000.

Analysts note that this was worse-than-expected and is the highest reading of the measure since July.

However, the same analysts believe that this report is unlikely to influence the likely decision by the US Federal Reserve to increase interest rates at the December Federal Open Market Committee (FOMC) meeting.

The current implied probability of a December rate hike is at 85 percent according to the CME Group's Fedwatch tool.

Analysts believe that the market has now fully factored in the expected December rate hike, and that the market is now unsure of when the next rate hike will occur.

Expectations were originally for a delay in the rate hike till 2016 but the FOMC meeting in late October confirmed that the Fed wants to raise rates before the end of 2015.

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.

There has not been an increase in the Fed's interest rate since June 2006, before the beginning of the American financial crisis.

Analysts believe the long-term outlook for the precious metal is bearish and that several rate increases will likely put extensive pressure on the precious metal.

There are further indications that China's demand for gold is likely to drop, as Chinese investors have become more savvy and are purchasing more lucrative interest-bearing assets.

Silver for March delivery fell 7.9 cents (0.56 percent) to close at $14.11 per ounce.

Platinum for January delivery dropped $9.9 (1.14 percent) to close at $855.90 per ounce.