Gold futures settled lower Monday, even as the cheer brought about by the EU deal faded with investors preferring the safe haven of the dollar and treasuries after some weak economic data from the U.S. An ISM report showed activity in the U.S. manufacturing sector declined more than expected in June, the first time in almost three years.
Activity in the U.S. manufacturing sector unexpectedly contracted in the month of June, a report by the Institute for Supply Management showed. The ISM purchasing managers index dropped to 49.7 in June from 53.5 in May, with a reading below 50 indicating a contraction in manufacturing activity. Economists expected the index to show a modest decrease of 52.0. The index pointed to a contraction for the first time since July 2009, when it read 49.2.
Gold for August delivery, the most actively traded contract, dropped $6.50 or 0.4 percent to close at $1,597.70 an ounce Monday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,603.60 an ounce and a low of $1,587.40 an ounce.
Last week, gold ended significantly higher after a deal at the European leaders' meet in Brussels, where it was agreed the EU would take urgent measures to stabilize the Spanish and Italian bond markets and the ailing eurozone banking sector.
The euro was hit after some shine from the EU deal last week wore off and Finland said it would oppose any move to utilize the eurozone permanent rescue fund to buy distressed sovereign debt.
The euro traded lower against the dollar at $1.2583 on Monday, as compared to $1.2658 late Friday in North America. The euro scaled a high of $1.2680 intraday and a low of 1.2570.
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 81.888 on Monday, up from 81.658 in North American trade late Friday. The dollar scaled a high of 81.96 intraday and a low of 81.53.
In other economic news, eurozone unemployment rate hit a new record high in May as companies struggled to contain costs in the midst of stringent competition and weak demand. The jobless rate rose to a record 11.1 percent from 11 percent in April, Eurostat said Monday. Nonetheless, the rate was in line with expectations.
China's factory sector expanded at the weakest pace in seven months in June as flagging global economic growth crippled demand for its manufactured goods both at home and abroad. The China Federation of Logistics and Purchasing (CFLP) and the National Bureau of Statistics said its purchasing managers' index for the manufacturing sector fell to 50.2 in June from 50.4 in May.
U.S construction spending increased more than expected in May even as revised figures showed stronger than initially reported construction spending growth in April, according to the Commerce Department. The initial estimate for construction spending in May came in at a seasonally adjusted annual rate of $830 billion, a 0.9 percent increase from revised April estimates. Most economists expected a far more modest increase of 0.2 percent.
Home prices in the UK stagnated in June as global economic gloom curtailed demand, a survey by Hometrack said Monday. While prices remained unchanged compared to the previous month, the number of first time home buyers fell 0.5 percent, marking the first drop in five months. Property supply, however, increased 1.5 percent on month.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.