By Bharat Gautam

(Reuters) – Gold gained on Monday after a three-month low. Lower U.S. Treasury yields helped keep demand for zero-yield bullion above $1,800 an ounce, the psychological support level.

At $1,812.15 a pound, the price was 0.1% higher as of 02/27 GMT. U.S. gained 0.1%, to $1809.80.

Matt Simpson, City Index’s senior analyst for markets, said that $1800 being such an important round number it is natural for it provide some level support to some traders who are brave enough to buy dips, while other traders close profitable shorts.”

On Friday, gold prices plunged more than 1 percent to their lowest point since February 4, at $1,798.86 an troy ounce.

But it isn’t looking good for gold bugs at the moment. Simpson stated that even if there is a rebound from $1,800 the momentum favors another downside.

As investors seek safety from fears of global growth and continue to make safe-haven precious metal less appealing to buyers, the dollar opened this week at a twenty-year high.

However, benchmark declined, buoying the demand for noninterest bearing gold.

Loretta Mester, Cleveland Fed President, stated Friday that inflation must fall for at least “several more months” before Federal Reserve officials are able to safely say it has reached its peak. She also said she was open to considering a faster rate hike in September if data don’t show any improvement.

Bullion can also be considered an inflation hedge. However, it is highly sensitive to U.S. bond yields and short-term interest rates, increasing the potential cost of keeping it.

Spot silver dropped 0.1% to $21.06/ounce. Platinum was the same at $938.46. Palladium rose 0.3%, reaching $1,949.88.