Gold rallies to record high on softer dollar, rate-cut expectations

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Silver, platinum, palladium log weekly gains

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Dollar down for fourth straight week

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Traders await Jackson Hole for more Fed cues

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Gold up 2.8% this week

(Updates prices as of 1827 GMT)

By Brijesh Patel and Rahul Paswan

Aug 16 (Reuters) - Gold prices soared to an all-time high on Friday as the dollar weakened on growing expectations for an interest-rate cut from the Federal Reserve in September, and as tensions in the Middle East bolstered demand for bullion.

Spot gold was up 1.7% to $2,498.72 per ounce by 02:27 p.m. EDT (1827 GMT), after hitting a record high of $2,500.99 earlier. U.S. gold futures settled 1.8% higher at $2,537.80. Bullion rose 2.8% this week.

The dollar index fell 0.4% and posted a fourth week of losses, making gold more appealing for buyers overseas.

"Gold surged to a fresh all-time high and breached $2,500 after two weeks of extremely choppy trading as bulls finally impose their will," Tai Wong, a New York-based independent metals trader, said.

"Attention will now shift to focus on Jackson Hole and Fed Chair Powell's speech a week from today to provide a more detailed outlook on the shape of the upcoming rate cuts."

U.S. Federal Reserve Chair Jerome Powell is scheduled to deliver remarks on the economic outlook next Friday, the first full day of the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming.

The July releases of the producer price index and consumer price index this week indicated inflation was subsiding, which could keep the Fed on track for a 25-basis-point rate cut next month.

Fed Bank of Chicago President Austan Goolsbee said the U.S. economy is not showing signs of overheating, so central-bank officials should be wary of keeping restrictive policy in place longer than necessary.

"Ongoing geopolitical strife and potential escalation that Iran could get involved, and the war in Ukraine, those factors all contribute to safe-haven demand for gold," said Everett Millman, chief market analyst with Gainesville Coins.

Bullion is considered a hedge against geopolitical and economic uncertainties and tends to thrive in a low-interest-rate environment.

Silver rose 1.4% to $28.81 per ounce and platinum fell 0.2% at $950.76. Palladium fell 0.1% to$943.25.

All metals posted weekly gains.

(Reporting by Brijesh Patel and Rahul Paswan in Bengaluru; Editing by Shreya Biswas, Rod Nickel and Vijay Kishore)