Gold Futures Settle Slightly Weak

Gold futures settled slightly lower on Wednesday after moving in a tight band as investors weighed the likely moves by the Federal Reserve with regard to interest rate hikes in the coming months.

Traders also focused on the developments on the geopolitical front following the missile blast in Poland.

U.S. President Joe Biden said it was "unlikely" that the blast in Poland was caused by a missile fired from Russian territory.

The dollar's recovery from lower levels weighed on the yellow metal. The dollar index, which dropped to 105.86 in the Asian session, climbed to 106.50 later on, gaining about 0.1%.

Gold futures for December ended lower by $1.00 at $1,775.80 an ounce.

Silver futures for December ended up $0.006 at $21.524 an ounce, while Copper futures for December settled at $3.7735 per pound, down $0.0465 from the previous close.

Markets also noted the European Central Bank's comments in its Financial Stability Review, published today. Risks to financial stability in the euro area increased amid rising inflation and low economic growth, the ECB said in its review.

The ECB observed that financial conditions tightened as central banks took measures to combat inflation.

With rising inflation and low economic growth, households, firms and governments that hold more debt became vulnerable. Moreover, they are adding to financial market stresses and testing the resilience of investment funds.

"All of these vulnerabilities could unfold simultaneously, potentially reinforcing one another," the review said.

In U.S. economic news, the Commerce Department's data showed retail sales surged by 1.3% in October after coming in unchanged in September. Economists had expected retail sales to jump by 1%.

Meanwhile, the Federal Reserve released a separate report unexpectedly showing a modest decrease in U.S. industrial production in the month of October.

The Fed said industrial production edged down by 0.1% in October following a revised 0.1% uptick in September. Economists had expected industrial production to inch up by 0.2% compared to the 0.4% increase originally reported for the previous month.

The National Association of Home Builders' report showed a continued decrease in U.S. homebuilder confidence in the month of November.

The report showed the NAHB/Wells Fargo Housing Market Index declined for the 11th consecutive month, slumping to 33 in November after tumbling to 38 in October. Economists had expected the index to dip to 36.

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