By Sherin Elizabeth Varghese

(Reuters) - Gold entered 2024 under pressure from a jump in the U.S. dollar, but held its ground on expectations the Federal Reserve will cut interest rates this year and rising concerns over attacks on shipping in the Red Sea.

Spot gold steadied at $2,061.59 per ounce on Tuesday by 2:30 p.m. ET (1930 GMT) after rising as much as 0.8% earlier in the session. U.S. gold futures slipped 0.1% to $2,070.30.

The dollar index rose 0.8% on track for its biggest daily gain since July, supported by higher U.S. yields, making dollar-priced bullion more expensive for overseas buyers. [US/] [USD/]

But the possibility of escalation in the Red Sea kept gold prices supported, said Daniel Pavilonis, senior market strategist at RJO Futures.

Gold prices surged 13% in 2023 in their first annual rise since 2020 and are forecast to reach record highs in 2024, as lower interest rates reduce the opportunity cost of holding non-yielding bullion.

"As we saw how much of a lift the price of gold obtained from expectations of rate cuts in 2023, we could well see significant gains in 2024 when central banks actually start loosening their policies," said Fawad Razaqzada, market analyst at City Index, adding that the actual timing and extent of the rate cuts will depend on incoming data.

This week, market attention is on the minutes, scheduled for Thursday, of the last Fed meeting. Data on U.S. job openings and December non-farm payrolls, both due on Friday, will also be closely followed.

Silver fell 0.5% to $23.64 per ounce while platinum was down 0.5% to $982.18.

Palladium slipped 2.2% to $1,074.62, its lowest since Dec. 14.

"The outlook for palladium demand partly hinges on the pace of the energy transition, particularly growth in EV demand, as higher battery electric vehicle growth is negative for palladium demand," HSBC said in a note.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; additional reporting by Deep Vakil; Editing by Alexander Smith, Emelia Sithole-Matarise and Sriraj Kalluvila)