Gold rises as U.S. manufacturing falls short of expectations

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday as the Dow Jones declined in morning trade amid slower manufacturing expansion.

The most active gold contract for June delivery rose 2.8 U.S. dollars, or 0.22 percent, to settle at 1,254 dollars per ounce.

The U.S. Dow Jones Industrial Average declined by 21.17 points, or about 0.1 percent as of 1900 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven.

Especially, U.S. auto sales in March plunged despite discounts, the industry has just revealed on Monday.

March is usually supposed to be the month U.S. auto sales rebound from decreases in January and February. However, Kia Motors Corp. and Ford Motor Co. reported some of the biggest declines, which led to the fall of car-makers' shares.

Combined deliveries for Kia and its affiliate Hyundai Motor dropped 11 percent, and Ford's slumped 7.2 percent last month, while General Motors, Fiat Chrysler and Toyota also reported not-so-good sales.

The rise of gold was also supported by a report on overall U.S. manufacturing which disappointed traders. The Institute for Supply Management said its manufacturing index fell slightly to 57.2 in March from 57.7 in February. Although a reading of 50 or better indicates a robust economy, but the pace of expansion seemed to have slowed down.

However, the gold's gains were capped as the U.S. Dollar Index rose by 0.11 percent to 100.56 as of 1920 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions.

Silver for May delivery dropped 4.4 cents, or 0.24 percent, to close at 18.212 dollars per ounce. Platinum for July delivery rose 5.8 dollars, or 0.61 percent, to close at 958.20 dollars per ounce. Endit