Gold Bounces Following Crude Price

Gold rose more than $3 an ounce on Monday after crude oil extended gains, but dealers said the precious metal lacked incentives to breach key resistance levels.

Spot gold hit a high of $602.25 an ounce and was quoted at $601.40/602.40 an ounce in New York.

Gold dropped more than $4 an ounce in the U.S. market on technical selling after it failed to clear $607-$608 an ounce. The metal is down around 18 percent from its 26-year peak of $730 an ounce in mid-May.

Speculative buying from Japanese investors aided gold, but physical trading was generally quiet with Hong Kong closed for a holiday and China out of action for the week-long National Day holiday.

"If you look at the oil price, I don't think gold should go down further. I think we can break $607, even though the first attempt was met by profit taking," said a dealer in Singapore, referring to gold's rise to $606.50 last week.

"The physical sector is a kind of quiet but I do see some buying ahead this morning," he said.