Gold declines to four-week trough as dollar climbs off three-month low

Gold futures fell to December 27 lows in American trade as the dollar index rose from October 16 lows, following earlier data from China, the world's largest metals consumer, while the US market closes down for the Martin Luther King holiday. 

As of 03:20 GMT, gold futures due in February shed 0.26% to $1,279.30 an ounce, marking four-week lows, while the dollar index rose 0.04% to 96.38, marking January 4 highs. 

From China, the economy grew just 6.4% y/y, the lowest such rate since 2009, and down from 6.5% in the previous quarter. 

Retail sales rose 8.2% in December, up from 8.1% in November, while industrial output rose 5.7%, accelerating from 5.4%, as the unemployment rate rose to 4.9% from 4.8%. 

Last week, China announced plans to increase spending by cutting taxes while doubling efforts to support growth and provide liquidity to the market. 

Other reports indicated China is making suggestions to shave to the US-China trade imbalance, including a buying spree for the next six years of US products to over a trillion dollars, after China's trade surplus with America reached $323 billion last year. 

Finally, Gold holdings at SPDR Gold Trust, the world's largest gold-backed investment fund, rose 12.05 tonnes on Friday to a total of 809.76 tonnes marking June 29 highs, after gold prices marked the third monthly profit in a row in December. .