This paper presents a detailed magnet defect fault detection analysis through fluxgate sensors by monitoring the leakage flux around permanent magnet synchronous motors. The flux spectra of electric machines contain direct and most critical information to monitor and characterize magnet defect faults and their progressions. In the mainstream diagnosis techniques based on phase current and back-EMF analysis, the fault corresponding signature characteristics may vary and cause misleading results depending on motor topology, winding configuration, number and location of defective magnets, and controller parameters. In this paper, it is shown that leakage flux analysis provides some superior results for magnet defect diagnosis. For this purpose, the fault patterns in the leakage flux spectrum are exhaustively analyzed at different torque/speed profiles. Simulation and experimental results show that the deployment of a direction sensitive fluxgate sensor in magnet defect fault detection yields very promising results both in time and frequency domain analyses.