Gold prices eased on Monday but hovered near the record peak hit last week, setting bullion on track for its best quarter in over eight years following a jumbo U.S. rate cut decision and expectations of another outsized reduction in November.
Spot gold was down 0.2% at $2,653.38 per ounce, as of 0404 GMT, owing to a rise in the U.S. dollar.
A stronger dollar makes gold less attractive for other currency holders.
Bullion has risen slightly over 14% so far this quarter, its best since January 2016.
On a monthly basis, gold has added 6% in September after hitting another record high of $2,685.42 on Thursday in a rally driven by the Federal Reserve's half-percentage-point cut, China's stimulus measures and ongoing Middle-East war concerns.
U.S. gold futures rose 0.3% to $2,674.80.
"Gold still looks poised to have a potential run at $2,700 if labour market data this week aligns with the potential of another 75 basis points of easing from the Fed by year-end," said Tim Waterer, chief market analyst at KCM Trade.
This week's data lineup includes U.S. ADP employment figures and nonfarm payrolls, which may provide further clarity about the condition of the U.S. labor market.
Speeches from Fed Chair Jerome Powell and Governor Michelle Bowman are also expected later in the day.
"If Powell's messaging keeps investors optimistic that more aggressive rate cuts are coming our way, the U.S. dollar may suffer while gold may again be a beneficiary," Waterer added.
Data on Friday showed that the U.S. economy retained some of its solid momentum in the third quarter, while inflation pressures continued to abate. This boosted expectations of an another outsized interest rate cut at the Fed's November policy meeting.
Zero-yield bullion tends to be a preferred investment in a low interest rate environment and during geopolitical turmoil.
Israel on Sunday launched airstrikes against the Houthi militia in Yemen and dozens of Hezbollah targets throughout Lebanon after earlier killing the Hezbollah leader.
In other metals, spot silver was down 0.4% to $31.49 per ounce, following a 12-year peak reached on Thursday and is set for quarterly rise of 8%.
Platinum edged 0.1% lower to $999.35 and palladium rose 0.1% to $1,012,50. Both metals are headed for quarterly gains.
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