Top Stories This Week: Gold Dips Below US$2,500, US$970 Million Silver Deal Turns Heads

Gold ended the week below US$2,500 after the latest employment data from the US Bureau of Labor Statistics. Meanwhile, a major deal was announced in the silver space.

The gold price experienced ups and downs this week, sinking to nearly US$2,470 per ounce on Wednesday (September 4) before rebounding back above US$2,500 the next day.

The precious metal closed below the US$2,500 level on Friday (September 6) following August employment data from the US Bureau of Labor Statistics. The report shows nonfarm payroll employment rose by 142,000 last month, with the unemployment rate staying steady at 4.2 percent. The healthcare and construction sectors led job gains.

August's 142,000 number for jobs missed analysts' expectations of 160,000, solidifying thoughts that the US Federal Reserve will cut interest rates at its next meeting, scheduled to run from September 17 to 18.

However, market watchers are still divided on how big of a reduction the central bank will make — CME Group's (NASDAQ:CME) FedWatch tool currently shows a 75 percent likelihood of a 25 basis point cut.

Speaking ahead of this week's jobs release, Gareth Soloway of VerifiedInvesting.com said that while a cut will almost certainly be good news for gold, a large decrease could signal concerns about the economy from the Fed.

"What (does the Fed) know about the economy that's going wrong — that the rest of Wall Street is ignoring, that investors are ignoring? Now number one, that's probably pretty good for gold, because it's a safety asset," he said.

"For a stock market that had fallen sharply about three, four weeks ago and is now rebounding to almost all-time highs — that's a big concern for me, and I think we have to just be aware that you have to read between the lines. It's good the Fed might cut, but if the Fed has to cut too much it's because something has drastically gone wrong in the economy."

Bullet briefing — US$970 million silver deal, Goldman copper forecast

First Majestic to acquire Gatos Silver

First Majestic Silver (TSX:FR,NYSE:AG) said on Thursday (September 5) that it plans to acquire Gatos Silver (TSX:GATO,NYSE:GATO), expanding its presence in Mexico.

If approved, the US$970 million deal will see First Majestic gain ownership of Gatos Silver's 70 percent stake in the Los Gatos joint venture, which operates the Cerro Los Gatos silver mine in the country. The combined entity is anticipated to produce 30 million to 32 million silver equivalent ounces annually.

First Majestic's Keith Neumeyer is known for his bullish views on silver, which he believes will reach triple digits. Although the white metal made it past the important US$30 per ounce level earlier this year, it's currently around US$28.50.

Goldman Sachs cuts copper forecast

According to Bloomberg, Goldman Sachs (NYSE:GS) made a significant cut to its 2025 copper price forecast, reducing its call to US$10,100 per metric ton, down from US$15,000 previously.

Copper reached an all-time high of close to US$11,500 in May of this year, but it's since fallen substantially, currently at the US$8,915 level. Goldman states that its outlook has been dampened by weaker-than-expected demand from China, the top consumer of the red metal, as well as risks to the Asian nation's economic outlook.

Goldman also reduced its aluminum price outlook, and remains bearish on nickel and iron ore. But on a brighter note, the investment bank is maintaining its gold price target of US$2,700 for early 2025. It describes the yellow metal as "the commodity where we have the highest confidence in near-term upside."

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Charlotte McLeod

Charlotte McLeod

Editorial Director

With an eye for detail and over a decade of experience covering the mining and metals sector, Charlotte is passionate about bringing investors accurate and insightful information that can help them make informed decisions.

She leads the Investing News Network's video and event coverage, and guides a team of writers reporting on niche investment markets.

With an eye for detail and over a decade of experience covering the mining and metals sector, Charlotte is passionate about bringing investors accurate and insightful information that can help them make informed decisions.

She leads the Investing News Network's video and event coverage, and guides a team of writers reporting on niche investment markets.

Learn about our editorial policies.