Gold futures on the COMEX division of the New York Mercantile Exchange ended higher on Monday (Tuesday morning GMT ) , as reported disappointing U.S. manufacturing activity and a sharp drop in stock prices provide support for the precious metal .
The most active gold contract for April delivery rose 20.1 U.S. dollars, or 1.62 percent, to settle at 1259.9 dollars per ounce . The price of gold scored a loss of more than 22 U.S. dollars per ounce , or 1.8 percent on Thursday and Friday last week , Xinhua reported .
Index of the Institute for Supply Management ( ISM ) followed closely on Monday showed that U.S. manufacturing activity in January grew at the slowest rate in eight months as the pace of new orders slowed sharply , which weighed on stocks and the U.S. dollar , thus providing support to the gold trade , according to market analysts .
The ISM index dipped to 51.3 percent in January from 56.5 percent in December . This figure represents the lowest level since May last year . After ISM fell , the U.S. dollar also fell to its lowest level against the Japanese yen in more than two months .
Also on Monday , U.S. stocks traded sharply lower on Wall Street due to manufacturing data weaker than expected , which helped investors turn to gold market . Silver for March delivery rose 28.9 cents, or 1.51 per cent to close at 19.409 dollars per ounce .
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