SecItemAdd always returns error -34018 in Xcode 8 in iOS 10 simulator

In Xcode 8.1 GM Release Notes Apple acknowledged the problem and suggested a cleaner workaround:

Keychain APIs may fail to work in the Simulator if your entitlements file doesn’t contain a value for the application-identifier entitlement. (28338972) Workaround: Add a user-defined build setting to your target named ENTITLEMENTS_REQUIRED and set the value to YES. This will cause Xcode to automatically insert an application-identifier entitlement when building.

Note that from what I have tried, it only works in Xcode 8.1. Although the text can mislead you into a build setting, what you need to do is add this to your Environment Variables, in your scheme.

Xcode 8.2 will solve this:

Resolved in Xcode 8.2 beta - IDE Keychain APIs work correctly in Simulator. (28338972)

This can happen if you have a test target that does not have a host app. To fix

1. add a dummy host app :

2. Enable automatic code signing and add a team :

3. Enable keychain sharing in capabilities

I was able to work around this in my app by adding Keychain Access Groups to the Entitlements file. I turned on the Keychain Sharing switch in the Capabilities section in your test app, and it is working for me as well.

Item to add to entitlements:

<key>keychain-access-groups</key>
<array>
    <string>$(AppIdentifierPrefix)com.evgenii.KeychainBugDemo</string>
</array>

I have only tried this on macOS Sierra (10.12), so I'm not sure if it will work for you on 10.11.5.