Gold prices eased on Tuesday, as rising expectations of fewer U.S. rate cuts this year overshadowed safe-haven demand amid ongoing tensions in the Middle East.

Spot gold fell 0.2% to $2,376.90 per ounce by 09:26 ET (1326 GMT). The yellow metal touched an all-time high of $2,431.29 on Friday in anticipation of Iran's retaliatory attack against Israel.

Data on Monday showed U.S. retail sales increased more than expected in March. The 10-year Treasury yields were up for the second consecutive day, making non-yielding bullion less attractive.

"The market is in pause mode and waiting for the other shoe to drop on this Israeli-Iran confrontation. You will see another rally in gold if the situation escalates," said Jim Wyckoff, senior analyst at Kitco Metals.

"If the Middle East conflict de-escalates, market focus will turn to the Fed. It has become apparent that Fed is not going to be able to cut rates soon, which is a bearish element for gold and silver markets."

Federal Reserve Chair Jerome Powell told a U.S. Senate panel just over five weeks ago the Fed was "not far" from gaining confidence in inflation falling to the level needed to cut interest rates but policymakers, investors and outside analysts have lost a bit of faith in that outlook in light of a series of strong economic data.

On gold, "we lift our 3 and 12 month price targets to $2,200 and $2,000 per ounce. We recommend not to position for lower prices now, even though we remain convinced that in the medium to longer term, there should be more downside than upside," wrote Julius Baer analyst Carsten Menke in a note.

The Shanghai Futures Exchange said it will raise the trading bands for gold and silver contracts to 8% from 6% and 7%, respectively.

Spot silver fell 1.4% to $28.48 per ounce, platinum gained 0.3% to $971.85 and palladium was down 1.3% to $1,021.75.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Krishna Chandra Eluri)