*

Israel has signalled it will retaliate against Iran, but

not how

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Dollar rally stalls after rare FX warning from finance

chiefs

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Traders expect fewer U.S. rate cuts in 2024

(Recasts as of 1001 GMT)

By Harshit Verma

April 18 (Reuters) - Gold prices rose on Thursday on a

weaker U.S. dollar and as investors sought a safe-haven on fears

the Middle East conflict could widen, dampening headwinds from

the prospect of fewer U.S. rate cuts this year.

Spot gold was up 0.8% at $2,379.33 per ounce at 1001

GMT. It had touched an all-time high of $2,431.29 last Friday.

U.S. gold futures rose 0.2% to $2,393.70.

"The weakening dollar has been supportive of precious metals

across the board today. There are also other supportive factors

like geopolitical risks and central bank diversification that

have played a role," said Bank of China International (BOCI)

analyst Xiao Fu.

The U.S. dollar fell for a second day after a rare warning

by the finance chiefs of the United States, Japan and Korea over

the sharp decline in other currencies. A weaker dollar makes

gold more attractive for other currency holders.

On the geopolitical front, Israel has signalled it will

retaliate to a volley of attacks from Iran, but has not said

how. European Union leaders have decided to step up sanctions

against Iran.

"However, with rate cut expectations from the Fed being

delayed and scaled down, and with the natural profit-taking that

comes when prices rally quickly, we may see some pressure on

gold prices as they consolidate in the current range - but not a

sharp decline," BOCI's Fu said.

Federal Reserve officials are now being more careful about

discussing the timing of rate cuts, with Chair Jerome Powell on

Tuesday signalling rates may stay higher for longer.

Traders are now pricing in less than 50 basis points of rate

cuts this year, while pushing back bets on the first quarter

point cut to September from June or July.

Higher interest rates reduce the appeal of holding

non-yielding gold.

Spot silver rose 0.8% to $28.42 per ounce, platinum

was up 0.4% at $941.75 and palladium gained 0.3%

at $1,028.80.