(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 risingexpectations of an interest rate cut by the U.S. FederalReserve.
Spot gold was up 0.2% at $1,430.01 an ounce as of02:00 p.m. EDT (1800 GMT), after touching its highest since July3 at $1,432.20. U.S. gold futures settled up 0.3% at$1,432.90 an ounce.
Prices had jumped about 1.5% in the previous session as thedollar fell after weaker-than-expected U.S. housing data. TheU.S. currency was last down about 0.1% against keyrivals.
"The dollar has resumed lower, and this has allowed gold tofind renewed buying interest following Wednesday's rally," saidFawad Razaqzada, market analyst with Forex.com.
Gold prices fell to a low of $1,414.36 earlier in thesession, but recovered after the dollar eased.
"Gold's longer-term trend is in the bullish direction sotraders are happy to keep fading the dips in what is asupportive fundamental backdrop with dollar and stocksstruggling," Razaqzada said.
Increased bets on a Fed rate cut have kept gold wellsupported above $1,400 and overall momentum is positive,analysts said.
Interest rate futures traders are pricing in a 65% chance ofa 25-basis-point cut this month and a 35% likelihood of a50-basis-point cut, according to the CME Group's FedWatch tool.
"The anticipation of a rate cut has really driven a lot ofthe 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 WealthManagement LLC.
Silver rose 1.4% to $16.19 per ounce, extending gainsfor a fifth straight session. It touched its highest since Feb.20 at $16.21 earlier and posted its biggest one-day percentagegain in more than five months on Wednesday.
"There was a huge relativity gap (when gold rose to amulti-year high in June) so, I think there is some of thatrotation. People are getting out of gold or paring length ingold and adding to length in silver," INTL FCStone analystEdward Meir said.
"The (gold silver) ratio traders have been saying silver ischeap, so there is some ratio trading going on as well andsilver charts looks very strong once we broke out thatresistance at $15.50, that brought lots of fund buying."
Spot platinum was up 0.4% at $846.17, after touchinga two-month peak of $852.32. Palladium fell 1.5% to$1,514.59 per ounce, after slipping to its lowest level in morethan three weeks at $1,506.50.
(Reporting by K. Sathya Narayanan and Karthika SureshNamboothiri in Bengaluru; editing by Susan Thomas and NickZieminski)