Gold futures fell nearly one percent in American trade as the dollar index gained ground, following earlier labor, personal spending and income data from the US.

As of 02:19 GMT, gold futures due in December slid 0.69% to $1,203.10 an ounce, while the dollar index added 0.21% to 94.80 against an array of major rivals.

Earlier US data showed personal spending rose 0.4%, same as June and matching estimates, while personal income rose 0.3% as expected, slowing down from 0.4% in June.

Core personal spending rose 0.1%, same as before and matching estimates, while growing 2.0% y/y as expected, up from 1.9%.

US unemployment claims rose 3 thousand in the week ending August 25 to 213 thousand, slightly below estimates of 214 thousand, while continuing claims fell 20 thousand in the week ending August 18 to 1.708 million from 1.728 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 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 759.87 tonnes, the lowest since February 2016, with gold prices on track for the fifth monthly decline in a row, the longest such streak in over five years.