Gold Futures Settle Higher On Dollar Weakness, Inflation Concerns

Gold prices climbed on Wednesday, lifting the most active gold futures contracts to their highest settlement since June 11, as the dollar eased a bit from 16-month highs and on lingering concerns about rising inflation.

The dollar index dropped to 95.73 before recovering to 95.82, down 0.1% from the previous close.

Gold futures for December ended up by $16.10 or about 0.9% at $1,870.20 an ounce, gaining after two straight days of losses.

Silver futures for December ended higher by $0.223 at $25.167 an ounce, while Copper futures for December settled at $4.2660 per pound, down $0.0855 from the previous close.

Data released by the Commerce Department showed an unexpected decrease in new residential construction in the month of October, although the report also showed a bigger than expected spike in building permits.

The report showed housing starts slid by 0.7% to an annual rate of 1.520 million in October after tumbling by 2.7% to a revised rate of 1.530 million in September.

Economists had expected housing starts to jump by 1.6% to an annual rate of 1.580 million from the 1.555 million originally reported for the previous month.

Meanwhile, the Commerce Department said building permits surged up by 4% to an annual rate of 1.650 million in October after plummeting by 7.8% to a revised rate of 1.586 million in September.

Eurozone inflation increased as estimated in October, final data from Eurostat showed earlier today.

Inflation rose to 4.1% in October from 3.4% in September. The rate came in line with the flash estimate published on October 29. A similar rate was last registered in July 2008.

Elsewhere, U.K. consumer inflation surged to 10-year highs, fueling bets of an interest rate hike as early as next month.

Official data showed that U.K. consumer price inflation advanced to 4.2% in October from 3.1% in September. The rate was forecast to climb to 3.9%.

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