Gold prices hovered near a record high on Tuesday, ahead of the anticipated start of the U.S. interest rate reduction cycle, which could see policymakers deliver an outsized cut.

Spot gold was steady at $2,581.68 per ounce as of 0254 GMT. Bullion rose to a record high of $2,589.59 on Monday.

U.S. gold futures were also steady at $2,608.60.

“The rally in gold prices has taken a breather in today’s session,” said IG market strategist Yeap Jun Rong, adding that after recent gains driven by expectations of a more aggressive rate cut, there’s now some caution as investors await further clarity from policymakers.

All attention is on the U.S. Federal Reserve’s two-day policy meeting, which concludes on Wednesday. Markets are currently pricing in an 66% probability of a 50-basis-point easing, compared with 43% on Friday.

Gold hits all-time high on deeper Fed rate cut expectations

Zero-yield bullion tends to be a preferred investment amid lower interest rates.

Gold prices might see a correction, even a 50 bp cut this week might lead to initial weakness as expectations are met and recent long positions are reduced, said Nicholas Frappell, global head of institutional markets at ABC Refinery.

The dollar was down 0.1%, making gold less expensive for other currency holders.

The August’s U.S. retail sales data at 12:30 GMT is also on investors’ radar.

Goldman Sachs reiterated its optimistic outlook on gold prices. “We find that ETF (exchange-traded fund) holdings backed by physical gold continue to rise gradually as the Fed policy rate comes down,” it said in a note on Monday.

Spot silver inched up 0.1% to $30.79 per ounce and platinum rose 0.6% to $986.90.

Palladium gained nearly 1% to $1,087.09, after hitting its highest level since April 11 earlier in the session.

Chinese markets are closed for the day due to the mid-autumn festival break.