Gold prices steadied on Wednesday as risk premiums over tensions in the Middle East eased while investors strapped in for U.S. economic data, due later in the week, that could offer clues to the Federal Reserve's interest rate path.

Spot gold eased 0.1% to $2,318.50 per ounce by 9:20 a.m. ET (1320 GMT), after having hit its lowest since April 5 in the previous session. U.S. gold futures fell 0.2% at $2,336.50. Spot silver dipped 0.3% to $27.20.

Bullion prices have fallen over $100 after hitting a record high of $2,431.29 on April 12.

The dollar index firmed 0.2%, making greenback-priced bullion less attractive to overseas buyers.

"The gold and silver market is seeing correction with a de-escalation in the Middle East conflict. The key question is if these corrections will turn into near-term price downtrend that would signal market tops are in place," said Jim Wyckoff, senior analyst at Kitco Metals.

"Market focus is back on economic reports and the Fed. If we see hot inflation data, then it is going to be harder for Fed to cut rates and gold could drop to below $2,200."

The U.S. gross domestic product (GDP) data is due on Thursday and the Personal Consumption Expenditures (PCE) report on Friday.

Traders now expect the first Fed rate cut to come, most likely in September. Higher interest rates reduce the appeal of holding non-yielding gold.

In the long term, gold will rise further, with 2024 being an election year, persistent geopolitical conflict and increasing U.S. debt, said Jonathan Rose, Genesis Gold Group CEO.

"Central banks have a monstrous appetite for gold right now, and that is definitely not slowing down," he added.

Platinum lost 0.4% to $903.61, while palladium edged 0.6% lower to $1,013.75.

"Both (platinum and palladium) metals have been under pressure as consumers draw down on inventories. However, palladium will be harder hit amid rising electric vehicle sales due to its limited uses elsewhere," ANZ analysts wrote in a note.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Tasim Zahid)