Gold up on weaker U.S. equities

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday as weakness in the U.S. dollar gave support to the precious metal.

The most active gold contract for December delivery rose 2.1 U.S. dollars, or 0.15 percent, to settle at 1,359.60 dollars per ounce.

Gold was given support as the U.S. Dow Jones Industrial Average fell by 38 points, or 0.21 percent as of 1700 GMT.

Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

The precious metal was prevented from rising further as the U.S. Dollar Index rose by 0.11 percent to 95.70 as of 1700 GMT.

The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

A report released by the U.S.-based Institute for Supply Management on Monday also put pressure on gold as it showed its key ISM manufacturing index at a reading of 52.6. Analysts noted that this figure reflected hauling employment and delays in delivery time but not necessarily a weakening in demand.

As traders continue to weigh the potential for a rate hike before the end of 2016, analysts believe Fed intends to soak up some of the banks' 2.5 trillion U.S. dollars of excess reserves as the U.S. economy begins to recover.

Banks become more willing to take risks in a bullish economy, and as a result could potentially release some of their excessive reserves, flooding the economy with cash, causing inflation.

Silver for September delivery added 15.3 cents, or 0.75 percent, to close at 20.5 dollars per ounce. Platinum for October delivery rose 12.7 dollars, or 1.10 percent, to close at 1,163.30 dollars per ounce. Endit