An employee arranges one kilogram gold bars for a photograph in Bangkok, Thailand, on Jan. 13, 2016.

Gold took a breather on Monday after piercing the key $2,500 ceiling in the previous session, as investors booked profits from the record run and positioned for more cues from the Federal Reserve and developments in the Middle East.

Spot gold was down 0.4% at $2,497.28 per ounce as of 10:06 a.m. ET (1406 GMT), shy of the record high of $2,509.65 hit on Friday. U.S. gold futures edged 0.1% lower to $2,535.50.

"Gold might have gotten too far, too fast on the upside and we believe there's an opportunity for a further pullback," especially considering the Fed is unlikely to hit at anything more than a quarter-point rate cut, said David Meger, director of alternative investments and trading at High Ridge Futures.

Traders currently see a 75.5% chance of the Fed cutting interest rates by 25 basis points (bps) in September, according to the CME FedWatch Tool.

Focus was now on minutes from the Fed's last policy meeting on Wednesday and Chair Jerome Powell's speech at an economic symposium in Jackson Hole on Friday.

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