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Gold remains weak after downbeat U.S. manufacturing report
The shiny metal showed a drop on the daily basis as data released from the U.S. showed that manufacturing recorded an unexpected contraction of 49.7 in June from a prior of 53.5.
The data raises concerns the economy may face a slowdown in the second quarter, especially with the tensions from the euro area.
Later in the week, investors will also track the U.S. jobs report to seem the latest developments in the U.S. jobs market, where U.S. employers probably hired 90,000 in June from 69,000 in May, while unemployment lingered at 8.2%, according to median forecasts.
After the rise in gold and other riskier assets on Friday after EU leaders` decision to combat crisis, worries returned once again as investors will wait to see the ECB`s action on Thursday.
ECB governing council is expected to cut interest rate by 25 basis points to 0.75% to reinvigorate the waning recovery after the latest data had showed the euro area economy will record a contraction in the second quarter.
In addition, the ECB is expected to continue its support to banks to provide them with liquidity needed until they become able to create funds.
Today, data showed that euro area manufacturing recorded a contraction for the fifth consecutive month in June as the final reading came in at 45.1, noting that a reading below 50 means a contraction and above means expansion, and unemployment rose to a record high of 11.1% in May.
Gold is currently trading around $1594.43 an ounce after touching a high of $1599.85 and a low of $1587.16.
Crude oil for August`s delivery is currently trading lower around $83.09 a barrel compared to the day`s opening of $84.75.
In the FX market, the U.S. dollar rose sharply after the U.S. data today, where the dollar index, which tracks the dollar movements versus a basket of major currencies, is hovering around 81.94 after opening today`s trades at 81.53.