BENGALURU- Gold prices steadied on Tuesday after surging to a record high in the previous session, following broadly dovish comments from US Federal Reserve officials and escalating tensions in the Middle East.

Spot gold was steady near $2,627.43 per ounce. Bullion hit a record high of $2,635.29 on Monday.

US gold futures were also nearly unchanged at $2,652.50.

“Gold prices continue to be well-supported amid a series of dovish Fed rhetoric overnight,” said IG market strategist Yeap Jun Rong.

Fed policymakers on Monday said their large half-point rate cut last week was meant to try to sustain what they see as an emerging and healthy balance in the economy.

Chicago Fed Bank President Austan Goolsbee said there are “lots of cuts” to come over the next 12 months, while Fed President Neel Kashkari noted that the actual path would depend on incoming data.

Fed futures traders have priced in 75 basis points in rate cuts by the end of 2024, according to the CME FedWatch Tool.

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

“A new war front opened in the Middle East between Israel and Hezbollah has also driven some flows for safe-haven gold in a bid to hedge against the geopolitical risks of any wider regional war,” Yeap Jun Rong said.

“Tensions in the region will likely be kept high for longer, which could see gold prices retain its bullish bias.”