Spot gold was trading at $733.55 an ounce, up $10.50 from New York's notional close on Friday, when it dropped more than 2 percent after a strong dollar and recession fears prompted investors to shift to less volatile assets.
"Currencies are likely to be affected by rate announcements and gold probably will react to that," said Adrian Koh, analyst at Phillip Futures in Singapore.
"For early week, it's definitely focused on the U.S. elections and I think this one should be bullish on the equity markets at least, but for gold, we will have to see how the dollar pans out," he added.
Gold lost 17 percent in October, its biggest decline since February, 1983, when it finished the month 18.2 percent lower. Bullion is down 12 percent this year, well below the recordhigh of $1,030.80 an ounce struck in March.
The euro firmed to $1.2845, having lost about 9.6 percent in October -- its worst monthly performance since its 1999 launch. The dollar posted its biggest annual monthly gains against a basket of currencies in more than 17 years on Friday.
The European Central Bank, the Bank of England and the Reserve Bank of Australia are expected to lower rates to support their struggling economies from the threat of a global recession.
"It appears the systemic risk that supported gold through the heat of the credit crisis has been alleviated somewhat by the action of the world's central bankers, however, it has not totally vanished," UBS analyst Glyn Lawcock said in a report.
"The risks in the global financial markets are a clear and present danger and subsequently, gold and gold equities will be of interest to a number of investors," he said.
Oil rose more than $1 on Monday, reversing earlier losses of more than $1 after Asian stock markets climbed on signs of improvement in credit markets.
"I guess everyone will be watching the results of the U.S. elections but I am not sure how it will actually affect the markets," said Koh of Phillip Futures.
New York gold futures rose $16.5 an ounce to $734.7.
Author: Jo Amey
