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Bullion hits highest since June 7

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US single-family housing starts fall in May

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US weekly jobless claims fell in latest week

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Silver up more than 2%

(Recasts, adds comments and updates prices)

By Brijesh Patel

June 20 (Reuters) - Gold prices rose more than 1% on

Thursday to their highest level in two weeks, as recent U.S.

economic data showing signs of a slowdown in the world's largest

economy boosted bets for interest rate cuts from the Federal

Reserve this year.

Spot gold was up 1% at $2,351.55 per ounce as of

10:04 a.m. ET (1404 GMT), its highest since June 7. U.S. gold

futures rose 0.8% to $2,365.50.

"The market is starting to increasingly expect the U.S.

central bank to start its easing program. I suspect we might be

getting some long positions getting installed into the market,"

said Bart Melek, head of commodity strategies at TD Securities.

U.S. jobless claims fell in the latest week, data showed,

suggesting a generally stable labor market. U.S. single-family

homebuilding in May fell 5.2% to a seasonally-adjusted annual

rate of 982,000 units.

Last week's data showed a moderation in the labour

market and price pressures, followed up with soft retail sales

data on Tuesday, suggesting that economic activity remained

lacklustre in the second quarter.

"The precious metals bulls are more confident late this

week, following the weaker U.S. retail sales report earlier this

week," said Jim Wyckoff, senior market analyst at Kitco Metals,

in a note.

Traders are currently pricing in about a 64% chance of a

Fed rate cut in September, according to CME FedWatch Tool. Lower

interest rates reduce the opportunity cost of holding

non-yielding bullion.

Safe-haven demand, driven by geopolitical and economic

uncertainty, as well as persistent central bank buying

contributed to a rally in gold from March to May, taking spot

prices to a record high of $2,449.89 on May 20.

Among other precious metals, spot silver rose

2.1% to $30.37 per ounce, platinum eased 0.1% to $979.45

and palladium gained 1.7% to $920.