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PRECIOUS-Gold drops 1%, set for weekly fall on positive U.S. data, trade optimism

K. Sathya Narayanan

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* Gold down about 0.9% so far this week

* Silver on track to post its first weekly fall in five

* U.S. non-farm payrolls report due at 1230 GMT (Updates prices)

Sept 6 (Reuters) - Gold fell 1% on Friday, putting it on track for its second straight weekly fall, as robust economic data from the United States and the planned resumption of trade talks between Washington and Beijing boosted appetite for riskier assets.

Spot gold was down 0.9% at $1,505.41 per ounce as of 1152 GMT, having shed as much as 1% earlier in the session, and retreating from an over six-year peak of $1,557 touched on Wednesday.

Gold fell more than 2% on Thursday and was down about 0.9% so far this week.

U.S. gold futures slid 0.8% to $1,513.80.

"The good economic news from the U.S. and the news of the restart of trade negotiations drove risk-on sentiment and in turn drove down demand for gold and other safe-haven assets," said SP Angel analyst Sergey Raevskiy.

U.S data showing private employers' payrolls rose and the growth of the services sector accelerated in August increased investors' appetite for riskier assets, which were already buoyed by positive signs on U.S.-China trade talks.

Investors now await the monthly U.S. non-farm payrolls report due at 1230 GMT for further cues on the health of the world's biggest economy.

"Most of it (gold's movement) will depend on the jobs report and if the data comes out stronger, we might see prices dip below (the $1,500 level)," Raevskiy said, adding people will buy on dips as gold is still supported by the lack of a "resolution" in the trade war and negative-yielding sovereign debts.

Expectations for further monetary policy easing around the globe was adding further support to bullion, analysts said. The yellow metal has risen about 17% this year.

Despite the reassuring U.S. economic signs, bond markets still expect the Federal Reserve to cut interest rates this month.

Lower interest rates and Treasury yields reduce the opportunity cost of holding non-yielding bullion.

Other precious metals fell along with gold, with silver slumping 2.7% to $18.12 per ounce, adding to its 4.8% slide on Thursday. It was on track to post its first weekly fall in five.

"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," Commerzbank analyst Daniel Briesemann said in a note.

Spot platinum dropped 3.1% to $928.95 an ounce, while palladium fell 2.1% to $1,526.62. (Reporting by K. Sathya Narayanan in Bengaluru; editing by Emelia Sithole-Matarise and Susan Fenton)