Bullion hit a record high of 2,509.65 on Friday
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Aug 19 Reuters Gold prices eased on Monday, but hovered around historic 2,500 level, as traders locked in profits following bullion39;s climb to an alltime peak in the previous session on expectations of a U.S. interest rate cut next month.

Spot gold was down 0.2 at 2,503.10 per ounce, as of 0724 GMT, and U.S. gold futures edged 0.2 higher to 2,541.50.

Enthusiasm over a likely interest rate cut by the U.S. Federal Reserve in September propelled bullion to an alltime high of 2,509.65 on Friday. This coupled with increased geopolitical tensions and robust central bankbuying have sent bullion over 20 higher so far this year.

Gold has been chasing the psychological 2,500 level for several months, and now that it has been reached, we are seeing some natural profittaking occur, said Tim Waterer, chief market analyst, KCM Trade.

Last week, strong U.S. retail sales print and lowerthanexpected unemployment claims, along with mild inflation data, restored confidence in the world39;s largest economy.

Traders are confident that the U.S. Fed will cut rates next month and the focus is now on the size of the reduction. They are pricing in a 75.5 chance of a 25basispoint cut, according to CME FedWatch tool.

Traders will be looking towards Jerome Powell39;s tone and language at Jackson Hole on Friday to fill in some of the blanks in…