Euro Drops, Gold Holds for Now: What's Next?

Gold's recovery faltered on Monday as the U.S. dollar surged to a nine-week high, curbing upward momentum for the precious metal. The greenback’s strength was bolstered by the euro’s decline, which fell for the 11th time in 12 sessions as investors price in a 25-basis point rate cut from the European Central Bank this Thursday.

Despite this, geopolitical tensions continue to lend underlying support to gold prices.

Any pullback could be expected to find initial support around $2,630, with a break lower potentially accelerating declines toward $2,600 as trading volumes thin. The September 18 low of $2,545 could also come into play.

On the upside, gold still has room to challenge all-time highs, with a move past $2,685 putting the key psychological level of $2,700 in focus.