Gold prices eased on Tuesday after scaling an all-time high, while all eyes were on the U.S. interest rate decision that traders are betting may bring an outsized cut.

Spot gold fell 0.2% at $2,577.40 per ounce by 0905 GMT after scaling an all-time high of $2,589.59 on Monday.

U.S. gold futures eased 0.2% at $2,604.80 after hitting a record peak of $2,617.4 in the previous session.

Market spotlight is on the Federal Reserve's two-day policy meeting that concludes on Wednesday. Markets are now pricing in a 67% chance of a 50 basis point cut versus 34% a week ago, after media reports revived the prospect of more aggressive easing.

"A 50-bp Fed rate cut this week, coupled with more dovish policy signals, is likely to send spot gold above $2,600," said Han Tan, chief market analyst at Exinity Group.

"A 25-bp cut, in and of itself, could be seen as a disappointment among some bullion bulls, who may be prompted into some profit-taking that sends spot gold back closer to $2,530."

Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.

Goldman Sachs in a note said that Fed rate cuts are poised to bring Western capital back into gold exchange-traded funds (ETFs).

"Increases in ETF holdings matter for gold prices. Since gold ETFs are fully backed by allocated physical gold, rising ETF holdings reduce the physical supply of gold available to the market," it added.

Investors will also keep a tab on U.S. retail sales data due later in the day. The Bank of England and the Bank of Japan also meet this week to discuss monetary policy.

Spot silver was flat at $30.76 per ounce after hitting a two-month high on Monday.

Platinum rose 0.1% to $981.83. Palladium gained 1% to $1,087.50, its highest level since April.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Alexandra Hudson)