PRECIOUS-Gold steadies near two-week high as dollar eases on rate cut bets

Reuters

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 (Updates prices)
    * Silver touches five-month high of $16.21
    * Platinum hits two-month high of $852.32/oz
    * Palladium slips to lowest level in more than three weeks
    * GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

    By K. Sathya Narayanan
    July 18 (Reuters) - Gold prices held steady on Thursday,
holding close to a two-week high, as the dollar eased on rising
expectations of an interest rate cut by the U.S. Federal
Reserve. 
    Spot gold  XAU=  was up 0.2% at $1,430.01 an ounce as of
02:00 p.m. EDT (1800 GMT), after touching its highest since July
3 at $1,432.20. U.S. gold futures  GCcv1  settled up 0.3% at
$1,432.90 an ounce.
    Prices had jumped about 1.5% in the previous session as the
dollar fell after weaker-than-expected U.S. housing data. The
U.S. currency  .DXY  was last down about 0.1% against key
rivals.  USD/ 
    "The dollar has resumed lower, and this has allowed gold to
find renewed buying interest following Wednesday's rally," said
Fawad Razaqzada, market analyst with Forex.com.
    Gold prices fell to a low of $1,414.36 earlier in the
session, but recovered after the dollar eased. 
    "Gold's longer-term trend is in the bullish direction so
traders are happy to keep fading the dips in what is a
supportive fundamental backdrop with dollar and stocks
struggling," Razaqzada said. 
    Increased bets on a Fed rate cut have kept gold well
supported above $1,400 and overall momentum is positive,
analysts said. 
    Interest rate futures traders are pricing in a 65% chance of
a 25-basis-point cut this month and a 35% likelihood of a
50-basis-point cut, according to the CME Group's FedWatch tool.
 US/ 
    "The anticipation of a rate cut has really driven a lot of
the momentum we've seen lately. If we don't get the rate cut,
gold is going to head back into $1,300," said Jeffrey Sica,
founder, president and chief investment officer of SICA Wealth
Management LLC.
    Silver  XAG=  rose 1.4% to $16.19 per ounce, extending gains
for a fifth straight session. It touched its highest since Feb.
20 at $16.21 earlier and posted its biggest one-day percentage
gain in more than five months on Wednesday.
    "There was a huge relativity gap (when gold rose to a
multi-year high in June) so, I think there is some of that
rotation. People are getting out of gold or paring length in
gold and adding to length in silver," INTL FCStone analyst
Edward Meir said.  
    "The (gold silver) ratio traders have been saying silver is
cheap, so there is some ratio trading going on as well and
silver charts looks very strong once we broke out that
resistance at $15.50, that brought lots of fund buying."
    Spot platinum  XPT=  was up 0.4% at $846.17, after touching
a two-month peak of $852.32. Palladium  XPD=  fell 1.5% to
$1,514.59 per ounce, after slipping to its lowest level in more
than three weeks at $1,506.50.

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GRAPHIC-2019 asset returns    http://tmsnrt.rs/2jvdmXl
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 (Reporting by K. Sathya Narayanan and Karthika Suresh
Namboothiri in Bengaluru; editing by Susan Thomas and Nick
Zieminski)
 ((Sathya.Narayanan@thomsonreuters.com; within U.S. +1 651 848
5832, outside U.S. +91 80 6749 3226/1298; Reuters Messaging:
sathya.narayanan.thomsonreuters.com@reuters.net))

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