* TSX closes down 54.76 points, or 0.43 percent, at 12,695.14 * Railway stocks fall on U.S. manufacturing data * U.S. manufacturing growth slowed in March By Allison Martell TORONTO, April 1 (Reuters) - Canada's main stock index slipped in sluggish trading on Monday as railway shares fell after data showed the U.S. manufacturing sector grew at its slowest pace in three months and gold mining stocks extended their year-to-date decline. The resource-heavy index has fared poorly in recent weeks, even as equity markets south of the border hit record highs, as investors shy away from some energy plays and retreat from gold mining stocks. "They have not been a very positive group to be in recently," Paul Hand, managing director at RBC Capital Markets, said of the gold miners. "On days when there is nothing happening (there is) reversion to the mean, and the mean is an angle downward." But Hand said he was not reading too much into the direction of the market, as volume was low. Several exchanges in Europe and Asia were closed on Monday, and trading was light in Toronto. The heavyweight materials sector, which includes gold miners, fell 0.9 percent. In a research note, Bank of America Merrill Lynch warned that year-over-year declines in gold, silver and copper prices during the first quarter, combined with cost pressures, would likely hit precious metal miners' earnings, and could weigh on share prices. The Toronto Stock Exchange's S&P/TSX composite index closed down 54.76 points, or 0.43 percent, at 12,695.14. Industrial stocks weighed, and Canada's two main railways were the two most influential decliners. Canadian National Railway Co fell 1.8 percent to C$100.26, and Canadian Pacific Railway Ltd was down 2.7 percent at C$129.00. The pair pulled back after data from the Institute for Supply Management showed the pace of expansion in the U.S. manufacturing sector slowed unexpectedly in March. Canadian National and Canadian Pacific have both moved sharply higher in the past year, partly because investors view them as likely beneficiaries as oil producers struggle to move their product to market via pipelines. "They've surprised everybody, caught everybody off guard over the past year or so with the price explosion. I think a lot of that is hype and pomp," said Barry Schwartz, a portfolio manager at Baskin Financial Services. Canaccord Genuity analyst David Tyerman called the railways' valuations "stretched." "The stocks have been very strong performers and so they're going to be vulnerable to any number of things," he said. In the materials sector, Barrick Gold Corp, the world's largest gold miner, fell 1.2 percent to C$29.48. Before Monday's move, the stock had fallen nearly 15 percent this year to date. Yamana Gold Inc fell 1.9 percent to C$15.35. Shares of China Gold International Resources Corp Ltd dropped 13.3 percent to C$3.33 after a landslide at an exploration area near the company's Jiama mine in Tibet trapped 83 people. Rescue workers had recovered 36 bodies by Monday afternoon, the state-run news agency Xinhua said. Gold miners have fallen more than 15 percent so far this year, while the index's broader materials sector is down more than 10 percent. The price of bullion slipped 4 percent in the first quarter as the euro stayed weak against the greenback and stock markets rallied.