Aug 27 (Reuters) – Gold prices fell slightly on Tuesday following a slight recovery in the dollar, but losses were limited by investor optimism about impending U.S. interest rate cuts and ongoing concerns about the Middle East crisis.
Spot gold fell 0.4% to $2,507.96 an ounce at 02:38 GMT. Prices have risen more than 21.5% this year, hitting a record $2,531.60 on August 20.
US gold futures fell 0.5 percent to $2,543.20.
The dollar index rose slightly against its competitors, making gold less attractive to holders of other currencies.
A US interest rate cut in September is set in stone, but the debate over its size could lead to a wait-and-see attitude as investors await their assessments on upcoming economic data, said IG market strategist Yeap Jun Rong.
A low interest rate environment tends to increase the attractiveness of interest-free gold bars.
“We expect the uptrend in gold prices to continue, given its positive performance in previous Fed rate-cutting cycles, healthy central bank demand and its status as a good hedge against geopolitical and economic risks,” Yeap said.
Among other metals, spot silver rose 0.1% to $29.93 an ounce, platinum fell 0.5% to $957.55 and palladium rose 0.1% to $959.90.
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Reporting by Daksh Grover in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu
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