Gold price rose due to increased demand for the safe-haven asset as global stock indices and the U.S. dollar declined.
The U.S. dollar fell against other currencies after the release of the weaker-than-expected ISM manufacturing purchasing managers' index (PMI). The index declined to 51.1 in August from 52.7 in July, missing expectations for a fall to 52.6. It was the lowest level since May of 2013.
A reading above 50 indicates expansion, below indicates contraction.
The decline was partly driven by a fall in new orders.
Global stock markets traded lower on concern over a slowdown in the Chinese economy. The Chinese manufacturing PMI declined to 49.7 in August from 50.0 in July, in line with expectations, according to the Chinese government. It was the lowest level since August 2012.
A reading above the 50 mark indicates expansion, a reading below 50 indicates contraction.
"There is insufficient growth momentum in the country's manufacturing sector," Zhao Qinghe, an economist at the National Bureau of Statistics, said.
The services PMI fell to 53.4 in August from 53.9 in July.
The final Chinese Markit/Caixin manufacturing PMI declined to 47.3 in August from 47.8 in July, beating the preliminary reading of a fall to 47.1. It was the lowest level since March 2009. The decline was driven by falls in total new orders and new export business.
The Caixin/Markit Services Purchasing Managers' Index (PMI) for China dropped to 51.5 in August from 53.8 in July, missing expectations for a rise to 53.9. The decline was driven by a weaker increase in new orders.
October futures for gold on the COMEX today rose to 1146.80 dollars per ounce.