Gold prices fell on Monday after weaker-than-expected U.S. construction spending and manufacturing data that pushed the dollar index lower but pressured by an agreement that averted a government shutdown.
U.S. Congressional negotiators hammered out a bipartisan agreement on a spending package to keep the federal government funded through Sept. 30, averting a government shutdown and dampening demand for non-interest paying bullion.
Many financial markets in Asia and Europe are closed on Monday for the May Day holiday. Tokyo markets will be closed for three days from Wednesday for a string of holidays known as Golden Week, and many investors take additional time off.
"The current level of the ISM Manufacturing Index is still indicative of healthy growth in the sector, but it will be important to see that level hold," said Royce Mendes, director and senior economist at CIBC Capital Markets in Toronto.
"Overall, this was a slightly worse outcome than expected and has seen the dollar weaken and yields fall."