Top Stories This Week: Powell Pits Gold Against Bitcoin, China Bans US Critical Minerals Exports

Gold market participants were focused on this week's US jobs report, which is expected to influence whether the Federal Reserve cuts interest rates at its next meeting.

The gold price was rangebound this week, trading between about US$2,625 and US$2,655 per ounce.

Market watchers were waiting for the latest US jobs data, which was released on Friday (December 5). The US Department of Labor's report shows that 227,000 jobs were added in November, ahead of the 200,000 expected.

The increase is far higher than the rise of just 12,000 in October, a month impacted by hurricanes and a labor strike.

The new figures will help inform the US Federal Reserve's interest rate decision when it meets from December 17 to 18. CME Group's (NASDAQ:CME) FedWatch tool currently shows a strong probability of a 25 basis point cut, with the likelihood standing at 86 percent. That would bring 2024's total to 100 basis points.

Comments from Chair Jerome Powell also shed some light on the direction the central bank may take.

Speaking at a recent event hosted by the New York Times, Powell said the US economy is in "very good shape," adding that he sees no reason for that to change. However, he still emphasized that the Fed will remain cautious.

In a somewhat surprising turn of events, Powell also weighed in on Bitcoin, saying it's a speculative asset that people are not using as a form of payment or store of value. In his view, that makes it a competitor for gold, not the US dollar.

“People use bitcoin as a speculative asset. It’s just like gold, only it’s virtual, it’s digital. People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar, it’s really a competitor for gold" — Jerome Powell, US Federal Reserve

The price of Bitcoin crossed the US$100,000 threshold for the first time ever after Powell spoke, sparking the idea that his words helped push it over the edge. After a strong year, Bitcoin is up close to 125 percent year-to-date.

Bullet briefing — Gold M&A heats up, China bans critical minerals exports

Gold M&A activity heats up

M&A activity was in the air in the gold space as Northern Star Resources (ASX:NST,OTC Pink:NESRF) announced plans to buy De Grey Mining (ASX:DEG,OTC Pink:DGMLF) in an all-share deal valued at AU$5 billion.

"De Grey’s Hemi development project will deliver a low-cost, long-life and large-scale gold mine in the Tier-1 jurisdiction of Western Australia, enhancing the quality of Northern Star’s asset portfolio to generate cash earnings" — Stuart Tonkin, Northern Star Resources

De Grey's main asset is the Western Australia-based Hemi gold project. Northern Star believes it will enhance its existing portfolio of assets, which is made up of the Kalgoorlie, Yandal and Pogo production centers.

Condor Gold (LSE:CNR,TSX:COG,OTC Pink:CNDGF) was also in focus on the M&A front after agreeing to be acquired by Metals Exploration (LSE:MTL). Condor's flagship La India project is located in Nicaragua, and Metals Exploration believes that it has a "relatively near-term path to production" that will benefit its shareholders.

China bans US critical minerals exports

China has responded to new American export controls by banning US exports of key critical minerals.

Gallium, germanium and antimony are included, and controls on graphite are also mentioned

The restrictions put in place by the US target China's semiconductor industry — officials have cited national security concerns related to Chinese advancements in artificial intelligence for military applications. Meanwhile, the critical minerals that fall under China's export ban are key in various high-tech industries, including defense.

The full impact of these actions has yet to be seen, but as Donald Trump prepares to take the helm in the US once again there's consensus among experts that trade tensions with China are likely to ramp up further.

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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.