PRECIOUS-Gold edges higher but faces first weekly decline in six

(Adds comments, updates prices)
* Palladium hits record of $2,401.98/oz, eyes biggest weekly
gain
in 4 years
* Platinum eases off near 3-year high
* World shares rise to record highs after China GDP data

By K. Sathya Narayanan
Jan 17 (Reuters) - Gold edged higher on Friday but was on
track to post its first weekly decline in six as solid Chinese
data and a preliminary U.S.-China trade deal improved risk
appetite.
Palladium jumped over 3% to register another record high as
the market grapples with deep supply shortages.
Spot gold XAU= was up 0.1% at $1,554.69 per ounce at 1401
GMT, but was heading for a weekly drop of around 0.5% - its
biggest since early November. U.S. gold futures GCcv1 rose
0.3% to $1,554.70.
"You would expect gold to trade a little bit lower after the
economic data from China. (But) what is pushing gold prices
higher is the sense of caution as to what to expect after the
Phase 1 trade deal," said FXTM analyst Lukman Otunuga.
"I think the sense of uncertainty and caution is encouraging
investors to take positions in gold."
World shares hit record highs after data showed China's
economy was stabilizing and the world's second-largest economy
ended 2019 on a somewhat firmer note as the trade truce revived
business confidence. MKTS/GLOB However, investors were still nervous as the Phase 1 deal
failed to address tariffs and some important core issues.
"The growth prospects and inflation outlook are still
fragile which supports gold prices but this is just a movement
of consolidation at the moment," said SP Angel analyst Sergey.
"We saw (a) couple of central banks cutting rates
yesterday," Raevskiy said, adding that euro zone economic growth
was still a big question among investors.
A Reuters poll showed that while the outlook for growth and
inflation remained lukewarm in the euro zone, the chances of a
recession have faded somewhat. In other metals, palladium XPD= rose 2.8% to $2,378.40 an
ounce, after hitting a record high of $2,401.98 earlier. The
auto-catalyst metal was set for its biggest weekly gain since
March 2016, having risen about 13% so far.
"There was no news that could have justified the upswing
apart from the good EU new car registration figures that were
reported yesterday," Commerzbank analysts said in a note, adding
a prolonged supply-deficit was still supporting prices.
Platinum XPT= jumped 1% to $1,014.25 after hitting its
highest since February 2017 at $1,041.05 in the previous
session. It was on track to post its biggest weekly gains since
the end of August.
Speculative purchases and technical buying have been driving
platinum prices higher, Commerzbank analysts said.
Silver XAG= advanced 0.5% to $18.02 per ounce.