Dollar broadly higher, gold extends losses after U.S. consumer spending data

On Monday the greenback was given a boost while gold prices extended losses, after data signaled that U.S. personal spending rose broadly matching market expectations in June and supporting optimism over the health of the economy.

Comex gold futures for December delivery dropped $4.30, or 0.39%, to trade at $1,090.80 a troy ounce during U.S. morning hours.

On July 24, the metal fell to a five-and-a-half year low of $1,072.30. Gold prices lost $79.50, or 6.72%, in July, the biggest monthly decline since June 2013.

Silver futures for September delivery on Monday lost 10.0 cents, or 0.68%, to trade at $14.64 a troy ounce.

The U.S. Commerce Department reported that personal spending added 0.2% in June, meeting expectations.

In May, personal spending rose 0.7% - the figure was revised from a previously reported increase of 0.9%.

Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.

The data also showed personal income expanded 0.4% in June, beating forecasts for a 0.3% increase, after expanding 0.4% in May.

Meanwhile, the core PCE price index added 0.1% in June, matching analysts' expectations and after rising 0.1% in May. The core PCE price index rose at an annualized rate of 1.3%, above estimates for 1.2% and following a gain of 1.3% in May.

The U.S. central bank uses core PCE as a means to help decide whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.

The dollar was boosted by the strong data.

The U.S. dollar index was last up 0.18% at 97.50.

EUR/USD dropped 0.16% to 1.0966 despite the data showing that the euro zone's manufacturing sector continued to rise at a steady pace at the start of the third quarter.

GBP/USD declined 0.21% to settle at 1.5596.

Later in the day, investors will await the Institute of Supply Management to release data on manufacturing activity.