The US dollar index reached its highest level in 9 weeks, driven by a decline in the euro ahead of an expected interest rate cut from the European Central Bank.

The expectations for a "modest" interest rate cut from the US Federal Reserve in the future, following a significant cut of 50 basis points last September, also supported the dollar's gains.

Gold prices stabilized during trading on Monday, amid a rise in the US dollar, and anticipation of further indicators from the US Federal Reserve regarding interest rates.

The dollar index rose by 0.2%, making gold less attractive to holders of other currencies.

Regarding trading in the yellow metal, gold futures settled at $2,677.4 per ounce.

Economic data released on Friday showed that producer prices in the US remained unchanged in September, indicating favorable inflation expectations and supporting views that the Fed will cut interest rates again next month. The yellow metal, which does not earn interest, is a preferred investment during times of low interest rates.

Investors are also awaiting US retail sales data set to be released later this week for more indicators on interest rate expectations.

Traders see a 89% chance of the Fed cutting the interest rate by 25 basis points at the November meeting, and an 11% chance of keeping it unchanged.

In a separate context, China announced yesterday that it would significantly increase debt in order to stimulate the struggling economy, but did not disclose the total size of the stimulus package.