Sept 25 (Reuters) - Gold prices were steady near record highs on Wednesday, as a weaker dollar and an escalated conflict in the Middle East lifted bullion's safe-haven appeal, while investors braced themselves for new signals on the U.S. interest rate trajectory.

FUNDAMENTALS

* Spot gold held its ground at $2,658.07 per ounce, as of 0016 GMT. Bullion hit a record high of $2,664.25 on Tuesday.

* U.S. gold futures edged 0.2% higher to $2,682.60.

* The dollar was down 0.2%, making greenback-priced bullion less expensive for other currency holders.

* Data on Tuesday showed that U.S. consumer confidence in September dropped by the most in three years amid mounting fears over the labor market, though more households planned to buy a home over the next six months.

* The data raised hopes that the U.S. Federal Reserve could do another outsized rate cut at its November policy meeting.

* Currently, Fed futures traders have priced in 75 basis points in rate cuts by the end of this year, according to CME FedWatch.

* Zero-yield bullion tends to be a preferred investment in a low interest rate environment and during geopolitical turmoil.

* Fed Governor Michelle Bowman said on Tuesday that key measures of inflation remain "uncomfortably above" the U.S. central bank's 2% target, warranting caution as the Fed proceeds with cutting interest rates.

* On the geopolitical front, Israeli airstrike on Beirut killed a senior Hezbollah commander on Tuesday as cross-border rocket attacks by both sides increased fears of a full-fledged war in the Middle East and Lebanon.

* Traders' attention will now turn towards Fed Governor Adriana Kugler speech due later in the day.

* Inflows to gold exchange-traded funds, particularly from Western investors, are set to rise in coming months, adding yet more positive stimulus for already record-high bullion prices, analysts said.

* Spot silver was steady at $32.11 per ounce, platinum rose 0.4% to $989.60 and palladium shed 0.2% to $1,054.75.

DATA/EVENTS (GMT) 0500 Japan Chain Store Sales YY Aug 1000 France Unemp Class-A SA Aug 1400 US New Home Sales-Units Aug

(Reporting by Daksh Grover in Bengaluru; Editing by Sherry Jacob-Phillips)

((Daksh.Grover@thomsonreuters.com;))