Nov 13 (Reuters) - Gold prices fell 1% on Thursday, pulling back from a three-week high earlier in the session amid a broad market sell-off following the reopening of the U.S. government.
Spot gold lost 1.1% to $4,151.86 per ounce as of 02:16 p.m. EST (1916 GMT). Elsewhere, spot silver fell 2.3% to $52.18 after rising to its highest level since October 17 earlier in the session.
U.S. gold futures for December delivery settled 0.5% lower at $4,194.50.
The U.S. government will resume operations after a record 43-day shutdown, under an agreement that funds federal operations through January 30.
"Precious metals are caught in a widespread selloff, where stocks, bonds, the dollar, and crypto are all under pressure and in the red," said Tai Wong, an independent metals trader.
"It's a classic buy-the-rumor, sell-it-all after the U.S. government re-opens."
Earlier in the session, spot gold hit a session high of $4,244.94, the highest level since October 21.
Initially, gold and silver markets rallied on the expectation that economic data released after the end of the shutdown will reveal U.S. labor market weakness and push the Fed toward at least one December rate cut, said Jim Wyckoff, senior analyst at Kitco Metals.
However, citing worries about inflation and signs of relative stability in the labor market after two U.S. interest rate cuts this year, a growing number of Federal Reserve policymakers are signaling reticence on further easing.
Private surveys have indicated job market weakness.
While the U.S. central bank reduced rates last month, Fed Chair Jerome Powell cautioned that further easing this year was not guaranteed, partly due to a lack of data.
Lower interest rates typically benefit gold, which offers no yield and is often seen as a safe-haven asset during periods of economic uncertainty.
Platinum was down 2.8% at $1,569.65 and palladium fell 3.7% to $1,419.75.
Reporting by Anmol Choubey, Pablo Sinha and Noel John in Bengaluru, additio
