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

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."

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

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