Gold prices rose on Wednesday on expectations of monetary policy easing from major central banks to shore up the global economy though a stronger dollar curbed gains.

Spot gold was up 0.7% at $1,426.62 per ounce as of 0951 GMT, but was still short of last week's peak at $1,452.60.

U.S. gold futures for August delivery rose 0.4% to $1,427.00 per ounce.

"Continued strong investment interest and buying in gold, expectations of upcoming rate cuts, high geopolitical tensions regarding Iran and a gloomy global economic outlook" are propping up gold prices today, according to Commerzbank analyst Carsten Fritsch.

The European Central Bank (ECB) is expected to signal easier monetary policy when it meets on Thursday. Investors are also looking ahead to the U.S. Federal Reserve's July 30-31 policy meeting at which it is expected to cut its overnight benchmark lending rate.

Futures FEDWATCH remain 100% priced for a rate cut of 25 basis points from the Fed next week, and even imply an 18% chance of 50 basis points.

Concerns about tepid economic growth have prompted central banks around the world to review their stance on monetary policy. The IMF on Tuesday lowered its forecast for global growth this year and next, warning that more U.S.-China tariffs, auto tariffs or a disorderly Brexit could further slow growth, weaken investment and disrupt supply chains. 

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Against a basket of other currencies, the U.S. dollar edged up to a five-week high of 97.755, following gains of nearly 0.5% the previous day. 

Reuters technical analyst Wang Tao said spot gold looked neutral in a narrow range of $1,412-$1,427 per ounce, and a breakout could suggest a direction.

Amongst other precious metals, silver gained 0.8% to $16.53.

"Silver is living up to its reputation of being volatile... retail and institutional investors are looking into silver ETFs, indicating it is in demand again," said Quantitative Commodity Research analyst Peter Fertig.

Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD , fell 0.25% on Tuesday from Monday, while the largest silver-backed ETF, New York's iShares Silver Trust SLV , rose 0.50% during the same period. Holdings of iShares Silver have risen 12.8% so far this year to their best year since 2010. 

Silver ETFs tracked by Reuters have risen to record levels to 666.2 million ounces.

Platinum rose 0.8% to $860.50 per ounce, while palladium inched 0.3% higher to $1,531.01.

(Reporting by Karthika Suresh Namboothiri in Bengaluru; editing by Emelia Sithole-Matarise) ((karthikasuresh.namboothiri@thomsonreuters.com; +91 80 6749 0997 (If within U.S. call 651-848-5832); Reuters Messaging: karthikasuresh.namboothiri.thomsonreuters.com@reuters.net))