PRECIOUS-Gold rises 1% after weak U.S. data boost rate cut bets

* Silver touches over four-month high of $15.96/oz
* Platinum holds steady near two-month high
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices)
By K. Sathya Narayanan
July 17 (Reuters) - Gold prices rose more than 1% on
Wednesday as weaker-than-expected U.S. data increased prospects
for an interest rate cut by the U.S. Federal Reserve, dragging
the dollar lower.
Spot gold XAU= was 1.2% higher at $1,422.20 per ounce at
13:51 p.m. EDT (1751 GMT). U.S. gold futures GCcv1 settled up
about 0.9% at $1,423.30.
The dollar .DXY retreated from a one-week high touched in
the previous session, making gold cheaper for investors holding
other currencies, after a federal report showed U.S. housing
starts fell in June for a second straight month. USD/ "The data shows that the economy is slowing down, the
housing market is slowing down and as a result of that the Fed
will most likely be aggressive on their stance of cutting
rates," said Phillip Streible, senior commodities strategist at
RJO Futures.
"If the Fed's going to cut rates there is no reason for you
to hold dollar, so that is why the dollar index is selling off."
U.S. interest rates futures implied traders fully expect the
U.S. central bank to cut rates at its policy meeting on July
30-31, with a 35% chance for a half-point decrease, up from a
28.7% chance, CME Group's FedWatch tool showed.
Lower rates tend to weigh on the dollar and decrease the
opportunity cost of holding non-yielding bullion.
Market participants are awaiting the release of the Fed's
Beige Book, a summary of economic conditions across the United
States at 2 p.m. Eastern U.S. time (1800 GMT) for direction on
interest rates.
Gold has also been supported by concerns over global growth,
exacerbated by data on Monday pointing to a slowdown in the
Chinese economy, analysts said. "Gold remains locked within the $1,400-$1,420 range, while
more broadly, we look for a move outside of $1,380-$1,440 for
medium-term direction," MKS PAMP said in a note.
Silver XAG= rose about 2.5% to $15.94 per ounce, extending
gains for a fourth straight session. It touched a more than
four-month high of $15.96 earlier in the session.
The metal was on track to post its biggest one-day
percentage gain since late January.
"Silver Exchange Traded Funds have continued to register
substantial inflows in recent days – inflows since the start of
the month have exceeded 600 tons," Commerzbank wrote in a note.
"It appears that the pronounced ETF inflows are gradually
having an impact after all."
Platinum XPT= rose 0.8% to $844.82 per ounce, trading
close to a two-month peak hit on Tuesday, while palladium XPD=
gained 0.9% at $1,538.85.