Gold gains ground as dollar hits ten-week trough

Gold futures rose in American trade as the dollar index hit July 9 lows, following a spate of US labor and manufacturing data today. 

As of 01:57 GMT, gold futures due in December rose 0.26% to $1,211.50 an ounce, while the dollar index fell 0.59% to 93.98 against a basket of major rivals, marking ten-week lows. 

Earlier US data showed unemployment claims fell 3 thousand in the week ending September 15 to 201 thousand from 204 thousand, besting estimates of 210 thousand, while continuing claims fell to 1.645 million in the week ending September 8, beating estimates of 1.705 million. 

The Philly manufacturing index rose to 22.9 from 11.9, beating expectations of 17.5. 

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, steadied on Wednesday at 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.