Step 1: Diamagnetic behavior.
Diamagnetic substances create an induced magnetic field in the direction opposite to the applied magnetic field. This causes a force that tends to align the substance in a direction where it minimizes energy.
Step 2: Orientation of the rod.
For a thin diamagnetic rod suspended in a uniform external magnetic field, it aligns itself perpendicular to the magnetic field. This minimizes the potential energy of the system, as the magnetic moment opposes the external field.
Step 3: Conclusion.
The rod will align itself perpendicular to the magnetic field, so the correct answer is (A).