Investing.com - Gold futures were higher for the fourth consecutive day on Monday, moving further off last week's two-year low as a bout of technical buying kicked in after prices broke above a key resistance level.
Some bargain buying and indications of mounting physical demand in Asia and the U.S. also contributed to gains.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,424.15 a troy ounce during European morning hours, up 2.1% on the day.
Comex gold prices rose by as much as 2.3% earlier in the session to hit a daily high of USD1,427.15 a troy ounce, the strongest level since April 15. Comex gold fell to a 27-month low of USD1,322.25 an ounce on April 16.
Gold prices were likely to find support at USD1,322.25 a troy ounce, the low from April 16 and near-term resistance at USD1,440.10, the high from March 7, 2011.
Gold's gains accelerated after breaking above a key technical resistance level close to the USD1,420-level, triggering a flurry of automatic buy orders.
Some bargain buying also contributed to gains, as investors returned to the market to seek cheap valuations amid speculation prices fell too far too fast. Gold futures lost 5.4% last week, the fourth consecutive weekly decline.
Prices of the precious metal are now down almost 26% since hitting an all-time high of USD1,920.80 an ounce in September 2011, sparking fears that gold's bull run is coming to an end.
Sentiment on the precious metal was dampened amid concerns the Federal Reserve will end its bond-buying program sooner-than-expected.
News that Cyprus was to sell some of its gold reserves to raise funds for its bailout also weighed on sentiment, as it sparked concerns other debt-ridden European governments would be forced to do the same.
The steep decline in gold prices prompted a rush of physical buying from buyers in Asia and the U.S.
The U.S. Mint has sold 153,000 troy ounces of gold coins so far in April, up more than three-fold from the 50,000 troy ounces the Mint had sold as of last Friday.
Buying interest also improved in top consumers India and China.
Elsewhere on the Comex, silver for May delivery rallied 2.1% to trade at USD23.44 a troy ounce, while copper for May delivery tumbled 1.4% to trade at USD3.103 a pound.
Copper futures have been under heavy selling pressure in recent sessions as global growth concerns and worries over a slowdown in demand from top consumer China weighed heavily on the industrial metal.
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