Gold Futures Tick Higher

Updated from 11:59 a.m. EST

Gold was rebounding Monday after a day of major losses at the end of last week, boosted by early-session strength in energy prices.

Contracts for April delivery of bullion tacked on $4.60 to close at $656.10 an ounce on the Comex division of the New York Mercantile Exchange. The PowerShares DB Gold(DGL Quote) exchange-traded fund, which tracks futures prices, was moving ahead also, up 0.3%.

The bullion ETFs, streetTracks Gold Shares (GLD Quote) and iShares Comex Gold Trust (IAU Quote) followed suit, both up 0.2%.

Friday saw spot gold prices plunge to about $646 from $660 a day before as higher prices increased the supply of scrap jewelry, according to a report from Montreal bullion dealer Kitco. Prices have climbed from about $608 in early January.

In the energy markets, crude futures traded as high as $59.95 before falling back to $58.90, off 12 cents recently. Oil is seen as a key driver of inflation, and some investors use gold as a hedge against a generally rising price level. In this instance, gold held on to its morning gains despite oil's slight afternoon decline because in the context of $50 crude prices -- seen briefly last month -- current prices still seem elevated.

Data showing better-than-expected growth in the Institute for Supply Management's nonmanufacturing index caused a fleeting pullback for gold, but the weakness quickly dissipated.

"[The index is] still above the norm as strength in the services sector bodes well for the U.S. economy," writes Randy Diamond, an analyst at Miller Tabak, in a research brief. Even though parts of the index pointed to softness, overall "the current composition of U.S. economic growth is desirable for continued economic expansion."

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