Gold hit a record high on Tuesday, building on its recent rally as Middle East tensions fed its safe-haven appeal, while investors latched on to fresh cues for more U.S. interest rate cuts.

Spot gold was up 0.3% at $2,636.20 per ounce by 1423 GMT after earlier hitting a record of $2,639.95. U.S. gold futures gained 0.3% to $2,660.80.

Gold has risen 27% in 2024, as fears of an all-out war in the Middle East escalated.

The current spike is being driven by a "flight to safety on Middle East concerns; that there's going to be some renewed possible action by Iran... think we'll continue to make another new set of highs," said Bob Haberkorn, senior market strategist at RJO Futures.

Gold could go above $2,700, perhaps as soon as the end of this week, if we see a further Middle East escalation, and with talk of more rate cuts coming, Haberkorn added.

Israel struck Hezbollah targets in southern Lebanon and said it would keep up the pressure.

Bullion's rally has also been propelled by the start of monetary easing by the U.S. Federal Reserve, which reduces the opportunity cost of holding zero-yield gold, especially following the central bank's larger-than-usual 50 basis point cut last week.

Adding to the momentum, Chicago Fed President Austan Goolsbee indicated he anticipates more cuts in the coming year.

Traders await Fed Chair Jerome Powell's remarks and U.S. inflation data later this week.

Investors also took stock of developments in top consumer China, with its central bank unveiling its biggest stimulus since the pandemic.

This is mixed for Chinese bullion demand as lower rates should support demand, but could also help alternative assets like Chinese equities and real estate, said UBS analyst Giovanni Staunovo.

Silver rose 0.8% to $30.90, platinum gained 2.1% to $976.70 and palladium climbed 1.5% to $1,057.25.

(Reporting by Anjana Anil in Bengaluru; editing by Arpan Varghese and Susan Fenton)