* Gold down 0.7% so far this week
* Wall Street advances on Friday (Recasts, adds comments, updates prices)
By Sethuraman N R and Asha Sistla
Sept 6 (Reuters) - Gold fell 1% on Friday as upbeat remarks from Federal Reserve Chair Jerome Powell and improved risk appetite offset a weaker-than-expected U.S. nonfarm payrolls report, putting bullion on track for a second straight weekly loss.
The U.S. Labor Department’s monthly employment report showed job growth slowed more than expected in August, with retail hiring declining for a seventh month.
Powell called the jobs report consistent with a quite strong labor market, in remarks made at a panel discussion in Zurich, adding that despite trade uncertainties he did not foresee or expect a U.S. recession.
“The sell-off in gold was mainly due to the slightly optimistic tone Powell delivered throughout the session. He was pointing out that the U.S. economy was still performing well. Markets were expecting it (speech) to be slightly dovish,” said Edward Moya, senior market analyst with OANDA.
Spot gold was down 0.7% to $1,508 per ounce at 02:38 p.m. EDT (1838 GMT), after falling more than 1% earlier in the session. U.S. gold futures settled down $10 at $1,515.50.
“The overall longer-term outlook for gold, however, remains strong and it’s going to be slightly choppy going into the rate decision in mid-September,” Moya said.
“The main reason we are going to see gold remaining supportive is the stimulus from the Fed and China’s central bank is going to keep coming. Investors are not expecting a 50 basis point cut in the September Fed meeting, but they are expecting the talks to be there.”
Uncertainties around U.S.-China trade ties, fears of a deceleration in global economic growth and negative Treasury yields around the world were further supporting bullion, analysts said.
However, a planned resumption of trade talks between Washington and Beijing, and robust U.S. economic data on Thursday did re-ignite some appetite for riskier assets, pushing gold down more than 2% in the previous session.
“One move lower like what we saw on Thursday is not going to change the overall trend and what central banks are doing with interest rates, which over time is going to push gold higher,” said Bob Haberkorn, senior market strategist at RJO Futures.
Bullion has risen about 17.6% so far this year.
Silver was down 3% at $18.06 an ounce, following Thursday’s 4.8% slump.
“We attribute the fall in prices to profit-taking following the steep price rises beforehand,” Commerzbank analyst Daniel Briesemann said in a note.
“We do not believe that this latest correction constitutes a trend reversal but see it rather as (gold and silver) prices taking a breather within an otherwise intact upward trend.”
Platinum fell 1%, to $949.67, while palladium fell 1.2% to $1,541.15. (Reporting by Asha Sistla and K. Sathya Narayanan in Bengaluru; Editing by Andrea Ricci and Tom Brown)