Gold climbs as dollar retreats to seven-week low

Gold futures rose in American trade as the dollar index plumbed July 21 lows, following earlier housing data from the US today. 

As of 01:54 GMT, gold futures due in December rose 0.42% to $1,207.90 an ounce, while the dollar index inched down 0.05% to 94.59 against a basket of major rivals, marking seven-week lows. 

Earlier US data showed housing starts surged 9.2% to an annualized 1.282 million units in August, compared to a 0.3% dip in July to 1.174 million, beating estimates of a 5.7% increase. 

Conversely, building permits fell 5.7% last month to 1.229 million, compared to a 0.9% increase in July to 1.303 million, while analysts expected a 0.5% increase to 1.310 million, as the current account deficit shrank to $101 billion from $122 billion in the first quarter. 

Yesterday, the White House announced new 10% tariffs on $200 billion worth of Chinese imports, to be increased to 25%, after the US already imposed 25% tariffs on $50 billion worth of Chinese imports, with China retaliating with 5-10% tariffs on $60 billion worth of US products. 

President Donald Trump threatened to impose new tariffs on $267 billion worth of Chinese imports if Beijing retaliated to the latest ones. 

US trade secretary Wilbur Ross said China "is out of bullets" to retaliate against US tariffs, noting that the measures are intended to change Chinese behavior, with close studying to guarantee limited increases to inflation. 

China filed another complaint against the US to the World Trade Organization, which isn't the first time China has done such a move. 

World Gold Council  

The World Gold Council recently forecast an increase of demand on the yellow metal in the second half of 2018 as inflation rises and the global trade war takes firmer shape and hurts currencies. 

Despite similar concerns in the first half of the year, gold prices were stymied by dollar's strength as the Federal Reserve tightened monetary policy on the back of strong US data.

Otherwise, Gold holdings at SPDR Gold Trust, the world's largest gold-backed investment fund, fell 0.3 tonnes on Tuesday to 742.23 tonnes, the lowest since February 2016, with gold prices marking the fifth monthly decline in a row in August, the longest such streak in over five years.