Gold prices extended gains to an all-time high on Monday, supported by a weaker dollar and the prospect of a big rate reduction by the U.S. Federal Reserve at its policy meeting this week.

Spot gold was up 0.3% at $2,582.87 an ounce by 9:41 a.m. ET (1341 GMT) after touching a record peak of $2,589.59. U.S. gold futures were steady at $2,610.50.

The dollar index eased 0.5%, making bullion more attractive to buyers holding other currencies.

"Fifty basis points rate cut (from the Fed) is priced in the market right now. That's why gold futures are as high as they are and I think that gold futures will come down if we only see a 25 basis point cut," Phillip Streible, chief market strategist at Blue Line Futures, said.

The focal point of this week is the Fed interest rate decision due on Wednesday. Traders' expectations are for a 63% chance of a cut of 50 basis points, according to the CME FedWatch tool.

The latest attempt on former president Trump created some political uncertainty that would tend to be positive for gold, said Peter A. Grant, vice president and senior metals strategist at Zaner Metals.

The FBI said that Republican presidential candidate Donald Trump was the subject of a second assassination attempt on Sunday.

Bullion is considered a safe asset during political and economic uncertainty. It also tends to thrive in a low rate environment as higher rates reduce the appeal of holding non-yielding gold.

"We expect recovery in strategic investments in gold will push prices higher. A 100 bp cut could see 200–250 (metric) tons of exchange traded funds (ETF) net flows over the coming months," ANZ analysts said in a note.

"We expect gold prices to move towards $2,700 in the short term and reach a high of $2,900 by the end of 2025," the note added.

Spot silver gained 0.6% to $30.84 an ounce. Platinum shed 0.6% to $989.70 and palladium was up 0.2% at $1,071.00.

(Reporting by Anushree Mukherjee in Bengaluru; editing by Barbara Lewis)