Gold hovers below record high, set for best quarter in eight years

Gold prices hovered just below last week's record high on Monday, with bullion set for its best quarter in more than eight years after this month's U.S. interest rate cut and expectations of another jumbo reduction in November.

Spot gold fell 0.2% to $2,653.00 per ounce, as of 0817 GMT, as traders locked in profits following last week's rally. U.S. gold futures rose 0.2% to $2,674.40.

Bullion has risen more than 14% so far this quarter, its best quarterly performance since January 2016.

On a monthly basis, gold has added 6% in September after scaling a peak of $2,685.42 last Thursday, driven by the U.S. Federal Reserve's 50 basis point cut, China's stimulus measures and escalating strife in the Middle East.

"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.

Fed Chair Jerome Powell and Governor Michelle Bowman are expected to deliver speeches later in the day, which could offer insights on the policy outlook.

"Market is looking ahead for some risk event today, especially a slew of Federal Reserve officials speaking," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.

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.

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 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 in Lebanon.

Among other metals, spot silver was down 0.5% at $31.47 per ounce, following a 12-year high last Thursday and is set for quarterly rise of 8%, its fourth consecutive gain.

Platinum shed 0.8% to $992.0. Palladium gained 0.5% to $1,016.00 and was headed for a quarterly gain.