Gold prices bounced back emphatically on Monday as a retreat in US Treasury yields offset headwinds from a relatively firm dollar, driving more investors towards the safe haven metal.

Spot gold rose 2.0% to $1,813.34 per ounce by 12:20 p.m. ET, after hitting a three-and-a-half-month low previously. US gold futures had a moderate gain of 0.3%, trading at $1,814.00 in New York.

[Click here for an interactive chart of gold prices]

Meanwhile, the US dollar inched lower, but still held near a two-decade peak, making gold expensive for overseas buyers, capping the metal’s gains.

Gold’s rebound was attributable to a dip in Treasury yields and a small pullback in the dollar, RJO Futures senior market strategist Bob Haberkorn told Reuters, adding that the overall trend for the dollar was “still high as the Fed is being aggressive with its rate hikes.”

“All things considered, gold is holding up, it should be significantly lower … it will find support slightly below the $1,800 level. Also, there is enormous demand for physical gold and silver,” he predicted.

“Many still regard gold as being significantly undervalued, and would be even more wiling to buy the metal now that prices have weakened,” said Fawad Razaqzada, market analyst at City Index.

(With files from Reuters)