Investing.com - Gold prices dropped on Monday as investors spent the weekend digesting Federal Reserve Chair Janet Yellen''s hawkish comments last week and bet that monetary stimulus tools that have supported gold for years will conclude this year followed by rate hikes in 2015, ending the precious metal''s rally.
On the Comex division of the New York Mercantile Exchange, Gold futures for June delivery traded at $1,309.90 a troy ounce during U.S. trading, down 1.95%, up from a session low of $1,308.60 and off a high of $1,335.60.
The June contract settled up 0.40% at $1,336.00 on Friday.
Futures were likely to find support at $1,307.70 a troy ounce, the low from Feb. 20, and resistance at $1,335.60, the earlier high.
Gold continued to slump after Federal Reserve Chair Janet Yellen suggested at a Wednesday press conference that interest rates could rise six months after the Fed''s bond-buying program ends, which is widely seen taking place this fall.
Fed asset purchases, currently set at $55 billion a month, aim to stimulate the economy by suppressing interest rates, weakening the dollar as long as they remain in effect and making gold an attractive hedge.
Gold and the greenback tend to trade inversely with one another.
Yellen''s comments left many expecting benchmark interest rates to begin rising around the first half of 2015, and gold slumped on concerns that past and present rounds of Fed bond purchases beginning in late 2008 will soon become history, while an era of tighter monetary policy grows closer on the horizon.
Meanwhile, Silverfor May delivery was down 1.56% at US$19.993 a troy ounce, while Copper futures for May delivery were down 0.31% at US$2.941 a pound.