BENGALURU- Gold prices were flat on Wednesday as investors weighed chances of an outsized interest rate cut by the Federal Reserve later in the day.

Spot gold was little changed at $2,571.28 per ounce. Bullion rose to a record high of $2,589.59 on Monday.

US gold futures rose 0.2 percent  to $2,597.60.

Markets are now pricing in a 65 percent  chance of a 50-basis-point rate cut, compared with 34 percent  a week earlier, according to the CME FedWatch tool.

“I think there’s a real risk that market pricing is too dovish, and that the Fed won’t deliver a dovish 50-bp cut. And, that could see yields and the dollar rip higher and weigh further on gold,” City Index senior analyst Matt Simpson said.

“But, let’s not lose sight of the established bullish trend and bullish market positioning, and dips towards the lows around $2,500 are likely to appeal to bears.”

Zero-yield bullion tends to be a preferred investment in a lower interest rate environment and during geopolitical turmoil.

Meanwhile, data released on Tuesday showed that US retail sales unexpectedly rose 0.1 percent  in August, suggesting that the economy remained on solid footing through much of the third quarter.

In the Middle East, militant group Hezbollah promised to retaliate against Israel, accusing it of triggering explosions in Lebanon on Tuesday that killed nine and injured nearly 3,000.