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U.S. Fed minutes due on Wednesday

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Gold hit a record high of $2,449.89 on Monday

(Recasts as of 1413 GMT)

By Harshit Verma

May 21 (Reuters) - Gold prices hovered near a record

peak on Tuesday, as traders looked to offset risks from

uncertain geopolitics to macroeconomic headwinds in major global

economies, while bullion also took support from an uptrend in

base metals.

Spot gold rose 0.2% at $2,430.33 per ounce, as of

1413 GMT, after scaling a record high of $2,449.89 on Monday.

U.S. gold futures fell 0.2% at $2,434.30.

"The general picture has really not changed (since March)...

which is just the general backdrop of very attractive global

macroeconomic and geopolitical environment for gold," said Nikos

Kavalis, managing director at Metals Focus.

Concerns about the

rapidly rising U.S. government debt

as the Federal Reserve tries to make for a soft landing are

drivers for some investors.

Recent data suggested that U.S. inflation resumed its

downward trend, but several Fed policymakers remained cautious

on cutting rates too soon.

Elsewhere, in China, where efforts are being made to

stabilise its crisis-hit property sector, investors there are

inclined to invest in safe-haven gold.

China itself, officially, has loaded up bullion in the

first quarter of 2024

.

"Gold's key role is to offset risk, whether financial,

geopolitical or volatility. That is not new, but sentiment has

now realised," StoneX analyst Rhona O'Connell said.

Global gold physically-backed gold exchange traded funds

(ETFs) saw net inflows of $1 billion last week - the largest

weekly inflow since October 2023, according to the World Gold

Council.

"More and more investors, including a lot of mainstream

investors, like macro funds and the likes, have missed a part of

that rally, and are convinced by the case for gold and therefore

want to participate," Kavalis said, adding however that the

market is ripe for correction before prices could further move

up.

Investors will keep a tab on minutes of the Fed's last

policy meeting due on Wednesday.

Following bullion's momentum, silver rose 1.3% to

$32.25 after hitting an over 11-year high in the last session.

Platinum rose 1% to $1,057.15 and palladium

rose 0.5% to $1,032.45.