PRECIOUS-Gold pares gains as trade optimism lifts stocks; palladium surges

* Palladium hits record high of $1,785.50/oz
* Silver climbs to a one-month peak of $18.33/oz
* Gold eyes best week in more than a month
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

(Recasts with added comments, details, updates prices)
By Brijesh Patel
Oct 25 (Reuters) - Gold steadied on Friday, paring earlier
gains as equity markets rose and the dollar strengthened after
Washington said it was close to finalizing parts of a trade pact
with Beijing, but bullion was still on track for a weekly gain.
Deficit-hit palladium notched an all-time high, meanwhile,
driven by short supplies of the auto-catalyst metal.
Spot gold XAU= was flat at $1,503.11 per ounce at 1:55
p.m. EDT (1755 GMT), having earlier hit its highest since Oct. 3
at $1,517.70 gaining nearly 1%. The precious metal was up about
1% so far this week.
U.S. gold futures GCcv1 settled mostly unchanged at
$1,505.30.
"Positive comments on a Phase 1 trade deal from two of
Donald Trump's hawkish trade triumvirate triggered profit-taking
after gold failed to breach $1,520, which has been the top of
the recent range," said Tai Wong, head of base and precious
metals derivatives trading at BMO.
"This combination saw earlier momentum based traders who
bought above $1,505 per ounce liquidate."
The U.S. Trade Representative's office said on Friday
deputy-level talks would carry on, but provided no details on
the areas of progress. President Donald Trump said the United
States was doing "very well" in the negotiations. CNBC earlier reported that top negotiators from the two
countries "made headway on specific issues" related to trade on
a phone call. A sense of positive developments on the trade front lifted
U.S. stocks higher, with the S&P 500 rising above its record
closing high. .N
Also weighing on gold, the dollar index .DXY gained 0.3%
and U.S. Treasury yields edged slightly higher. US/ USD/
However, offering limited support to bullion was the
continuing uncertainty surrounding Brexit. The European Union
agreed to London's request for a Brexit deadline extension on
Friday but set no new departure date, giving Britain's divided
parliament time to decide on Prime Minister Boris Johnson's call
for a snap election. Meanwhile, recent weak economic readings out of the United
States lifted expectations for another U.S. rate cut next week.
Gold tends to appreciate on expectations of lower interest
rates, which reduce the opportunity cost of holding non-yielding
bullion.
Elsewhere, palladium XPD= eased 0.4% to $1,769.59 an
ounce, having earlier hit an all-time high of $1,785.50.
Palladium is in a strong uptrend supported by the
fundamental story, Saxo Bank commodity strategist Ole Hansen
said. "If we do break $1,785, we could see some additional
buyers into that break, taking palladium to the 1,800 level."
Silver XAG= jumped 1% to $17.94 per ounce after hitting
its highest since Sept. 25 at $18.33. It was up 2.5% for the
week.
Platinum XPT= gained 0.6% to $929.42, on track for its
best week in eight.