(Corrects day in first paragraph to Thursday, not Wednesday)
July 18 (Reuters) - Gold prices rose to their highest in two
weeks on Thursday, as the dollar eased after
weaker-than-expected U.S. housing data increased expectations
for an interest rate cut by the U.S. Federal Reserve.
FUNDAMENTALS
* Spot gold XAU= was steady at $1,425.87 per ounce as of
0127 GMT, after hitting its highest since July 3 at $1,428.40.
* U.S. gold futures GCv1 rose 0.3% to $1,427.30 an ounce.
* The dollar index .DXY was down 0.1 against a basket of
major currencies on Thursday, making gold cheaper for investors
holding other currencies. USD/
* The index had climbed to a one-week peak in the previous
session on stronger-than-expected U.S. retail sales. But it
nudged lower as Treasury yields fell in the wake of weak U.S.
housing market data and concerns about the unresolved U.S.-China
trade conflict. US/
* U.S. homebuilding fell for a second straight month in June
and permits dropped to a two-year low, suggesting the housing
market continued to struggle despite lower mortgage rates. The Fed is widely expected to lower interest rates by 25
basis points at its policy meeting at the end of the month, with
some in the market even betting on a 50 basis points cut.
* The Fed reported on Wednesday that the U.S. economy
continued growing at a "modest" rate in recent weeks, with
consumers continuing to spend and a "generally positive" outlook
overall even in the face of disruptions caused by U.S. trade
policy. * Earlier in the week, U.S. President Donald Trump kept up
the pressure on Beijing with a threat to put tariffs on another
$325 billion of Chinese goods, amid market nervousness over when
face-to-face talks will resume. * Asian shares wobbled in early Thursday trading as Wall
Street stocks dropped on early signs that the U.S.-China trade
war could hurt corporate earnings. MKTS/GLOB
* SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.48% to 803.18
tonnes on Wednesday from 799.37 tonnes on Tuesday. GOL/ETF
DATA AHEAD (GMT)
* 0830 UK Retail Sales MM, YY June
* 0830 UK Retail Sales Ex-Fuel MM June
* 1230 US Initial Jobless Claims Weekly
* 1230 US Philly Fed Business Index July