The Federal Reserve's last meeting minutes caused some confusion in the markets about the future of monetary policies and interest rates in the US. 

Such confusion reduced the odds of the first US interest rate cut at March, and even caused doubts about such a cut at the May Fed meeting.

We here try to glean some potential hints from the Federal Reserve December 13 meeting about future policies, including: 

- No plans to immediately cut rates

Fed policymakers believe that starting interest rate cuts later in the year would be more appropriate to bring inflation reliably down.

- Main interest rates have peaked 

Several Fed policymakers believe that mainline interest rates have peaked out, although some opened the way for more rate hikes if needed.

- Fed expected interest rates to remain for for some time 

It's clear from the minutes that Fed policymakers expect interest rates to remain high for an extended duration in 2024.

- Fed takes cautious stance 

Policymakers have taken a clearly cautious stance with policy decisions, preferring to remain a bit aggressive until inflation is reliably moving towards the 2% target.

Overview

It's thus very clear that the Federal Reserve doesn't expect interest rate cuts for the time being, taking a more bullish stance on policy than expected. 

Dollar fell in European trade against a basket of major rivals, giving up three-week highs and on track for the first loss in five days on profit-taking.

The decline comes ahead of private sector jobs data for December, and US unemployment claims data, which will provide important clues on the likely path ahead for US policies.

Fed policymakers are now pressured into starting policy easing and interest rate cuts in 2024 to prop up the economy. 

The Index

The dollar index fell 0.30% to 102.15, with a session-high at 102.52, after rising 0.2% on Wednesday, the fourth profit in a row, hitting a three-week high at 102.73. 

The Federal Reserve's December 13 meeting minutes showed that policymakers believe interest rates should remain high for an extended duration.

Members believe that interest rate cuts would be more appropriate by the end of the year.

US Rates

Following the minutes, the odds for the first US interest rate cut at the Fed March meeting fell slightly to 73%.

Important Data

Now investors await important US data on the private sector and unemployment claims, with the ADP index expected to show the addition of 120 thousand new jobs in the US private sector last month. 

US unemployment claims are expected down slightly to 217 thousand last week from 218 thousand. 

Platinum prices declined in European trade on Thursday, sharpening losses for the fourth straight session and plumbing a two-week trough as demand declines on non-yielding assets following the Federal Reserve's last meeting minutes.

Concerns are growing about weak actual demand on the metal, especially in China as industrial activities slow down. 

Platinum Prices Today

Platinum prices fell 0.9% to $966 an ounce, the lowest since December 22, after losing 1.2% on Wednesday, with most dollar-denominated metals losing ground.

Platinum hit a six-month high on December 28 at $1,015 an ounce before entering a long duration of correction and profit-taking. 

Platinum rallied 6.9% in December, the second monthly profit in three months on prospects of interest rate cuts by global central banks during 2024. 

Platinum tumbled 7.5% last year, the second yearly loss in the last three years as Chinese economy slows down.

The automotive sector alone constitutes 41% of global demand on platinum, however the sector slowed down recently amid higher prices and weaker demand. 

The Fed

The Federal Reserve's December 13 meeting minutes showed that policymakers believe interest rates should remain high for an extended duration.

Members believe that interest rate cuts would be more appropriate by the end of the year.

The minutes showed a clearly cautious stance on inflation and interest rates and hurt the odds of multiple early US interest rate cuts this year.

Following the minutes, the odds for the first US interest rate cut at the Fed March meeting fell slightly to 73%.

Actual Demand 

China's economy continues to suffer from weaker industrial activities even as authorities launch more financial and monetary stimulus measures, which could bear fruit in the second half of the year. 

Gold prices rose in European trade on Thursday for the first session in five days, holding above two-week lows as the dollar stalls against a basket of major rivals.

The gains come ahead of important US data later today, which will provide important clues on the current conditions of the US labor sector, and will also provide fresh clues on the path forward for interest rates. 

Pricing for a US interest rate cut in March 2024 dipped after the release of the Fed's meeting minutes, which were more bullish than expected.

Gold Prices Today 

Gold prices rose 0.4% to $2,049 an ounce, after losing 0.8% yesterday, the fourth drop in a row, and the largest since December 11, plumbing two-week lows at $2,030 as the dollar gained ground following the Fed's minutes. 

The Fed 

The Federal Reserve's December 13 meeting minutes showed that policymakers believe interest rates should remain high for an extended duration.

Members believe that interest rate cuts would be more appropriate by the end of the year. 

The minutes showed a clearly cautious stance on inflation and interest rates and hurt the odds of multiple early US interest rate cuts this year.

US Rates 

Following the minutes, the odds for the first US interest rate cut at the Fed March meeting fell slightly to 73%.

The Dollar

The dollar index fell 0.2% on Thursday away from a threw-weeik high at 102.73, on track for the first loss in five days against a basket of major rivals. 

Now investors await important US labor data on private sector employment, in addition to unemployment claims for last week. 

And crucially, the US payrolls report will be released Friday, which could provide fresh clues on the likely path ahead for US monetary policies. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 4.33 tonnes yesterday to a total of 874.21 tonnes, the lowest since November 13.