June 17 (Reuters) - Gold prices on Monday edged away from a 14-month peak hit in the previous session, with the dollar gaining after encouraging U.S. retail sales data tempered fears about a sharp downturn in the world's largest economy.
FUNDAMENTALS
* Spot gold XAU= was down 0.2% at $1,338.97 as of 0113 GMT, after hitting its highest since April 11, 2018 at $1,358.04 on Friday.
* U.S. gold futures GCv1 fell 0.3% to $1,340.20 an ounce.
* U.S. retail sales increased in May and sales for the prior month were revised higher, suggesting a pick-up in consumer spending that could ease fears the economy was slowing down sharply in the second quarter. The retail report also sent the dollar and short-dated U.S. Treasury yields higher, flattening the yield curve.
* The dollar index .DXY versus a basket of six major currencies hovered near a two-week high on Monday. USD/
* Focus was shifting to the U.S. Federal Reserve meeting on Tuesday and Wednesday. nL2N23K1A5]
* According to CME's FedWatch tool, money market traders have slightly rolled back expectations of Fed easing following data that showed solid growth in domestic retail sales in May, but Fed funds rate futures are fully pricing in a 25-basis point cut by July. The U.S. Trade Representative's Office on Monday will kick off seven days of testimony from U.S. retailers, manufacturers and other businesses about President Donald Trump's plan to hit another $300 billion worth of Chinese goods with tariffs. U.S. Secretary of State Mike Pompeo told Fox News on Sunday that President Trump would raise the issue of Hong Kong's human rights with China's President Xi Jinping at a potential meeting of the two leaders at the G20 summit in Japan this month. Holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.6% to 764.10 tonnes on Friday from 759.70 tonnes on Thursday. GOL/ETF
* Hedge funds and money managers raised their net long positions in COMEX gold in the week to June 11, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Physical gold discounts in India widened to their biggest in five months this week as an upsurge in local prices dampened purchases, while China and Singapore saw demand rise from investors looking to hedge against a global slowdown. GOL/AS
DATA AHEAD (GMT)
* 1000
EU
Reserve Assets Total
May