The S&P/TSX composite index slipped 12.76 points to 13,430.01.
The market was held back by sliding gold stocks, which continued to deteriorate alongside bullion prices, which hit their lowest level since mid-July on worries about when the Fed will begin tapering its US$85 billion of monthly bond purchases.
The Canadian dollar was up 0.22 of a cent at 95.72 cents US, but off earlier highs as the greenback gained in value after the release of the Fed minutes.
Losses on U.S. markets picked up as minutes from the Fed's October meeting indicated the central bank believed that damage from the partial government shutdown was temporary. The minutes also contained a positive tone on the U.S. economy.
"Members believed the headwinds confronting the economy were likely to abate in the months ahead, with growth expected to continue at a moderate pace, and little change in the outlook since the September meeting, which unexpectedly opted not to taper," observed CIBC World Markets senior economist Peter Buchanan.
"Members did, however, take note of some improvement in the labour market outlook."
The Dow industrials lost 66.21 points to 15,900.82 while the Nasdaq fell 10.28 points to 3,921.27 and the S&P 500 index shed 6.5 points to 1,781.37.
The U.S. central bank's monthly purchase of bonds has kept long-term rates low and pushed investors into riskier but potentially higher-yielding assets such as stocks. The quantitative easing has underpinned substantial gains on many markets this year but left investors on edge for signs that the central bank will start reducing its asset purchases.
Janet Yellen, who is slated to become the next Fed chairman, has already expressed strong support for the low interest rate and bond buying policies aimed at stimulating U.S. growth.
"Some recent Fed comments have given confidence that the tapering of asset purchases will take place later than expected," said Paul Vaillancourt, managing director at Fiera Capital in Calgary, who wondered about the need for continued high levels of stimulus.
"We see (the asset purchases) as artificial life support that the markets don’t really need as much as they did a little while ago," he said.
Traders also considered a better than expected report on October retail sales.
The U.S. Commerce Department said retail sales rose 0.4 per cent in October, held back by a steep drop in gas prices. Excluding sales at gas stations, retail spending increased an even stronger 0.5 per cent. The consensus had called for October U.S. retail sales to have risen by 0.1 per cent following a flat showing in September.
U.S. home sales data for October came in a bit below expectations, with resales down 3.2 per cent last month from September to a seasonally adjusted annual pace of 5.12 million, a bit below expectations of 5.16 million because of higher mortgage rates and the U.S. government's fiscal impasse.
The gold sector lost about 3.7 per cent as December bullion declined $15.50 to US$1,259 an ounce, its lowest close since mid-July. Goldcorp (TSX:G) faded 80 cents to C$24.51 and Barrick Gold (TSX:ABX) dropped 73 cents to $17.94.
The gold sector is the biggest loser by far on the TSX this year, down about 45 per cent. Gold stocks and the precious metal have fallen out of favour amid improving economic conditions and very low inflation in much of the world, making gold less attractive as a hedge.
Speculation about the Fed tapering its asset purchases has also punished gold prices.
"I think the case for gold has passed and I don’t think you’re seeing the demand from investors as much and therefore there are much better investments," added Vaillancourt.
The base metals sector fell 0.5 per cent with December copper unchanged at US$3.16 a pound. First Quantum Minerals (TSX:FM) dropped 22 cents to C$18.33.
The energy sector led gainers, edging up 0.67 per cent while oil prices closed flat amid conflicting inventory data. The U.S. Energy Information Administration said that crude supplies rose 400,000 barrels last week. Analysts polled by Platts were looking for a decline of 500,000 barrels, though Prestige Economics had forecast a 1.4-million-barrel increase.
December crude dipped a cent to US$93.33 a barrel and Canadian Natural Resources gained 83 cents to C$34.67.
Consumer staples also supported the TSX as convenience store chain Alimentation Couche-Tard gained $1.50 to $73.50.