Gold Futures Settle At Over 3-Week Low As Dollar, Bond Yields Climb

Gold futures settled lower on Wednesday as the dollar firmed against most of its major peers and bond yields surged higher amid bets the Fed will continue to aggressively hike interest rates to tame inflation.

Minneapolis Federal Reserve Bank President Neel Kashkari said yesterday that the Fed may need to push its benchmark policy rate above 4.75% if underlying inflation does not stop rising.

Kashkari said today that the job market demand remains strong and underlying inflation pressure probably has not peaked yet.

The dollar index climbed to 113.10 earlier this afternoon and was hovering around 113.00 a little while ago, gaining nearly 0.8%.

The yield on the benchmark ten-year note has moved sharply higher following a modest pullback on Tuesday, reaching its highest levels in fourteen years.

Gold futures for December ended lower by $21.60 or about 1.3% at $1,634.20 an ounce, the lowest settlement since September 26.

Silver futures for December ended down $0.241 at $18,359 an ounce, while Copper futures for December settled at $3.3180 per pound, down $0.0440 from the previous close.

A report released by the Commerce Department on Wednesday showed new residential construction in the U.S. tumbled by more than expected in the month of September.

The report said housing starts plunged by 8.1% to an annual rate of 1.439 million in September after soaring by 13.7% to a revised rate of 1.566 million in August. Economists had expected housing starts to dive 6.4% to a rate of 1.475 million from the 1.575 million originally reported for the previous month.

Inflation in the U.K. in September increased to 10.1%, from 9.9% in August. Core inflation excluding the more volatile food and energy prices increased to 6.5%, from 6.3% in August.

The Final reading of inflation in The Euro Area in September stood at 9.9%, versus 9.1% in August.

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