* Palladium hits all-time high of $1,779.23
* Brexit summit in Brussels on Thursday and Friday
* SPDR Gold Holdings near 3-year highs
(Updates prices)
By Asha Sistla
Oct 16 (Reuters) - Gold rose on Wednesday on concerns that
Washington's stance on Hong Kong could hamper trade negotiations
between the United States and China and as investors awaited a
key Brexit summit, but bullion's gains were overshadowed by
deficit-hit palladium as it again set a record.
Spot gold XAU= rose 0.5% to $1,488.84 per ounce as of
1:51 p.m. EDT (1751 GMT). U.S. gold futures GCcv1 settled up
0.7% to $1,494.
In a move that soured ties between the United States and
China on Tuesday, the U.S. House of Representatives passed four
pieces of legislation taking a hard line on Beijing, three
related to pro-democracy protests in Hong Kong, drawing
opposition from China. "A lot of people think this (U.S. legislation on Hong Kong)
is going to hinder the negotiations with the tariffs (between
U.S. and China), so again, when the tariffs are questionable,
people run to gold," said Michael Matousek, head trader at U.S.
Global Investors.
Analysts are also wary of the outcome of the Brexit summit
in Brussels on Thursday and Friday that will determine whether
Britain is headed for a deal to leave the European Union on the
due date, a disorderly no-deal exit or a delay. Also helping gold, U.S. equity markets moved lower as
traders' worries about the legislation targeting Hong Kong
offset positive earnings. .N
Investors also await the U.S. Federal Reserve meeting at the
end of the month for clarity on further interest rate cuts.
Indicative of sentiment, holdings of the world's largest
gold-backed ETF, SPDR Gold Shares GLD , fell on Tuesday to
919.66 tonnes, but held close to their highest level in nearly
three years. GOL/ETF
Elsewhere, palladium XPD= rose 1.9% to $1,766.16 an ounce,
after hitting a record high of $1,779.23 earlier.
"The story with palladium is one of a continued
supply/demand imbalance. We've had a global supply shortfall of
palladium since 2012 and it doesn't appear to be ending anytime
soon," said Gregory Leo, chief investment officer and head of
Global Wealth Management at New York-based IDB Bank.
The metal, used in vehicle exhaust systems to reduce harmful
emissions, has climbed about 40% so far this year on a sustained
supply crunch.
However, U.S. Global Investors' Matousek said palladium's
recent jump has been more technical than anything else.
"Same as gold, if anything is rallying the way it is, the
trend looks great and people want to own it, bringing more
momentum players into the trade. The driver behind is about 75%
technical and 25% fundamental," Matousek said.
Silver XAG= was steady at $17.38 per ounce, while platinum
XPT= fell 0.3% to $886.12.
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Palladium's performance https://tmsnrt.rs/2OS7GWg
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