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, as of 0224 GMT. Bullion rose to a record high of $2,589.59 on Monday.

U.S. gold futures rose 0.2% to $2,597.60.

The Fed is expected to announce a cut to interest rates for the first time in more than four years at 1800 GMT. Chair Jerome Powell will hold a press conference afterward.

Markets are now pricing in a 65% chance of a 50-basis-point rate cut, compared with 34% 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 U.S. retail sales unexpectedly rose 0.1% 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.

On the physical front, India's August gold imports stood at $10.06 billion, compared with $3.13 billion in July, according to the trade ministry.

Among other metals, spot silver fell nearly 1% to $30.42 per ounce, platinum edged 0.2% lower to $979.85 and palladium shed 0.6% to $1,109.42.

(Reporting by Daksh Grover in Bengaluru; Editing by Subhranshu Sahu)