July 18, 2019 / 10:43 AM / 5 months ago

PRECIOUS-Gold eases from two-week high on profit-taking after Fed-driven rally

(Adds comments, updates prices)

* Silver hits five-month high

* Gold could climb to $1,439/oz -technicals

By Karthika Suresh Namboothiri

July 18 (Reuters) - Gold fell on Thursday as investors booked profits after the metal hit a two-week high earlier in the session on increased expectations of a dovish monetary policy stance from the U.S. Federal Reserve.

Spot gold slipped by 0.4% to $1,421.06 an ounce by 1009 GMT. Prices had jumped about 1.5% in the previous session and extended gains early on Thursday to hit $1,426.80, gold's highest since July 3.

Bullion had firmed on Wednesday after the Fed reported that the U.S. economy has continued to grow at a "modest" rate in recent weeks.

"At the moment, gold lacks a trigger to move beyond the levels we have seen earlier this year," said Julius Baer analyst Carsten Menke, adding that prices between $1,420 and 1,425 are attracting profit-taking.

Menke said much attention is focused on the U.S. central bank and that there is "a little bit of disappointment potential" for gold bulls who jumped too strongly on expectations for cuts to interest rates.

Increased bets on a Fed rate cut have kept gold well supported above $1,400 and overall momentum is positive, analysts said.

The Fed is widely expected to cut a total of 75 basis points by the end of the year.

Gold approached key resistance around $1,430 and short-term trading investors are taking advantage of gains, said Michael McCarthy, chief market strategist at CMC Markets.

Global stock markets, meanwhile, found little relief as the trade tussle between the United States and China rumbles on, helping to support gold.

U.S. President Donald Trump kept up pressure on Beijing this week with a threat to put tariffs on another $325 billion of Chinese goods.

Bullion prices could climb to $1,439 an ounce after clearing resistance at $1,421, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver rose 0.6% to $16.07, exceeding the $16 mark for the first time since February. Spot platinum was up 1% at $851.58 while palladium dipped 0.6% to $1,529.08. (Reporting by Karthika Suresh Namboothiri in Bengaluru Editing by David Goodman)

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