Gold price rose on concerns over the situation in the Middle East. The Saudi Arabian government said on Sunday that it had broken off diplomatic ties with Iran. The government has given Iranian diplomats two days to leave Saudi Arabia.

Bahrain and Sudan joined Saudi Arabia and cut ties with Iran.

The United Arab Emirates said that it would downgrade its diplomatic team in Iran.

The situation escalated after Saudi Arabia executed a Shia Muslim cleric.

Gold was also supported by the weaker-than-expected U.S. manufacturing data. The Institute for Supply Management released its manufacturing purchasing managers' index for the U.S. on Monday. The index declined to 48.2 in December from 48.6 in November, missing expectations for a rise to 49.0. It was the lowest level since June 2009.

A reading above 50 indicates expansion, below indicates contraction.

The decline was partly driven by a fall in employment. The employment index dropped to 48.1 in December from 51.3 in November.

February futures for gold on the COMEX today rose to 1083.00 dollars per ounce.