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Gold falls 1% on Powell’s comments and improved investor appetite for risk

UNITED STATES, WASHINGTON (OBSERVATORY) — Gold prices fell 1 percent on Friday after upbeat comments from US Federal Reserve Chairman Jerome Powell and improved investor appetite for risk, overshadowing a weaker-than-expected US jobs report.

Job growth in the world’s largest economy slowed more-than-expected in August, with the US retail sector falling for a seventh straight month, the Labor Department said.

Powell described the jobs report as being in line with a strong labor market, adding that despite commercial uncertainty, he did not expect a recession in the United States.

Analysts attributed the sell-off in gold to Powell’s comments that the US economy was doing well.

The price of spot gold for the late trading session of $ 1507.35 an ounce, down 0.77 percent after falling more than one percent earlier in the session.

US gold futures fell 0.6 percent to settle at $ 1515.50 an ounce.

Analysts said gold was supported by stimulus measures from major central banks, suggesting investors were expecting a 50 basis point cut at the US central bank meeting this month.

The uncertainty surrounding US-China trade ties, fears of sluggish global economic growth and negative government bond yields around the world are giving more support to the precious metal, they said.

But a planned resumption of trade talks between Washington and Beijing and strong US economic data on Thursday again sparked some appetite for riskier assets, sending gold down more than 2 percent in the previous session.

Gold prices are up about 17.6 percent from the start of the year.

Among other precious metals, silver fell 3.0 percent to $ 18.07 an ounce after recording a loss of 4.8 percent in Thursday’s session. Analysts attributed the losses to profit-taking sales after sharp price increases.

Platinum fell 1.17 percent to $ 947.19 an ounce, while palladium fell 1.3 percent to $ 1,539.00 an ounce.

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