Gold rebounds from early 2017 lows, dollar slips

Gold futures tilted higher in American trade off January 2017 lows, as the dollar index fell off 14-month highs, following a stream of housing, unemployment data from the US. 

As of 02:14 GMT, gold futures due in December rose 0.19% to $1,187.30 an ounce away from early 2017 lows, while the dollar index shed 0.32% against a basket of major rivals to 96.38, away from 14-month highs. 

Earlier US data showed housing starts rose 1.5% to an annualized 1.311 million units in July, edging out estimates of a 1.4% increase to 1.310 million. 

Building permits rose 0.9% last month to an annualized 1.168 million units, compared to a 12.9% slump in June to 1.158 million, while missing expectations of a 7.4% increase to 1.260 million. 

An index tracking the manufacturing sector in Philadelphia fell to 11.9 from 25.7 in July, missing estimates of 21.9.  

US unemployment claims fell a thousand to 212 thousand in the week ending August 11, compared to 214 thousand in the previous reading, while analysts expected 215 thousand. 

Continuing claims fell 39 thousand in the week ending August 4 to 1.721 million from 1.760 million, beating estimates of 1.740 million. 

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 tightens monetary policy on the back of strong US data.  

Recently, the World Gold Council reported a 7% drop in global demand in the first quarter of 2018 to 973.5 tonnes, the lowest since the first quarter of 2008, as investments fell 27% on the precious metal to 287 tonnes from 383 tonnes in the first quarter of 2017. 

Central banks' gold demand rose 42% to 116.5 tonnes, especially from Russia, while jewelry demand steadied at 487.7 tonnes, as mine supplies grew 1% y/y to 770 thousand tonnes. 

Gold holdings at SPDR Gold Trust, the world's largest gold-backed investment fund, steadied at 776.65 tonnes on Wednesday, the lowest since February 2016, after gold prices registered losses in July for the fourth month in a row.