Investing.com -- Gold prices rebounded on Monday, after falling sharply at last week's close to its lowest level in three months.
On the Comex division of the New York Mercantile Exchange, gold for April delivery rose 2.10 or 0.18% to $1,166.40 a troy ounce.
On Friday, gold futures plunged more than $32 an ounce after better than expected U.S. economic data exacerbated fears that the Federal Reserve could raise interest rates in June. Higher interest rates are a troubling sign for gold, which struggles to compete with yield-bearing investment strategies when the Federal Reserve tightens monetary policy. The yield on 10-year U.S. Treasuries fell by more than 1.25% on Monday to 2.209, after increasing by nearly 7% on Friday. Yields for the year are still up by more than 12%.
Gold futures reached a high of $1,174.40 in morning trading before, falling back to below $1,168 on a light day of trading. Gold futures likely found support at $1,160, its low from mid-December and resistance at $1,201.60, the high on Mar. 5.
In Europe, the European Central Bank started its highly-anticipated, EUR 60 billion quantitative easing program by reportedly making bond purchases on the German, Italian, French and Belgian markets. Yields on 10-year German bunds plunged more than 20% in late European trading to 0.31. Gold, which doesn't pay its investors anything, is widely viewed as an alternative for yield-bearing assets.
The Euro remained relatively stable against the U.S. dollar, increasing 0.08% or 0.0009 to 1.085. The modest gain halted a week-long losing streak, as investors prepared for the start of the bond buying program in the euro zone and heightened expectations of an interest-rate hike in the United States.
A strengthening dollar affects dollar-denominated commodities like gold by making it more expensive for holders of other currencies to purchase the metal.
Elsewhere in Europe, Greece foreign minister Yanis Varoufakis told Italian newspaper that the financially-strapped nation could hold a referendum to decide whether the euro zone's terms for its bailout program are acceptable. Mr. Varoufakis made the comments ahead of Monday's meeting of euro zone finance ministers, where Greece's reform measures for the package were expected to be discussed.
In the United States,Apple Inc (NASDAQ:AAPL) gained 2.85 or 2.25% to 129.45 after CEO Tim Cook launched the company's new iWatch during a press conference in California. The company's high-end, 18K gold Apple edition watch will start at around $10,000, Apple said.
Silver futures, meanwhile, for May delivery also fell 0.027 or 0.17% to trade at 15.782 a troy ounce.
Copper delivery for May soared 0.063 or 2.42% to $2.67 a pound. Copper is still down more than 5% on the year.