Gold prices surged to a record high on Tuesday as a cocktail of factors, from hopes of further U.S. rate cuts and China stimulus measures to elevated Middle East tensions, lifted demand.

Spot gold rose 0.2% to $2,633.25 per ounce by 1100 GMT after hitting a record of $2,639.95 earlier in the day.

U.S. gold futures gained 0.2% to $2,657.90.

Bullion scaled multiple record-highs after the U.S. Federal Reserve cut interest rates last week by a larger-than-usual 50 basis points. Bank of Chicago President Austan Goolsbee said he expects many more cuts over the next year.

"The possibility of another 50 bps cut at the next Fed meet and China's measures are lifting gold prices. There is always a risk of price correction but it might be small as investors who missed out on the rally will use it as an opportunity to add exposure," said UBS analyst Giovanni Staunovo.

China's central bank unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk.

This news is mixed for Chinese bullion demand as lower rates should support demand, but could support alternative assets like Chinese equities and the real estate market, Staunovo added.

Lower rates reduce the opportunity cost of holding gold.

Focus will be on Fed Chair Jerome Powell's remarks and U.S. PCE due later this week and gold could gain further if they reinforce the dovish outlook, said Ricardo Evangelista, senior analyst at ActivTrades.

Gold has jumped 27% in 2024, with prolonged conflicts in the Middle East adding to safe-haven demand.

Israel's military said it struck dozens of Hezbollah targets in southern Lebanon overnight, a day after launching a wave of airstrikes.

Commerzbank raised gold price forecast for end of 2025 to $2,600 from $2,550.

Spot silver rose 0.7% to $30.87, platinum gained 1.5% to $970.17 and palladium climbed 1.8% to $1,060.25.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sumana Nandy and Mrigank Dhaniwala)