PRECIOUS-Gold gains support from weak dollar post-Fed, palladium sets record

* Dollar lower, gives up overnight gains
* Palladium hits all-time high of $1,627.75/oz
* U.S., Chinese trade deputies to resume talks on Thursday

(Updates palladium record price)
By Asha Sistla
Sept 19 (Reuters) - Palladium peaked to an all-time high on
Thursday, while gold gained on a weaker dollar and as investors
looked for clarity on future U.S. interest rates after the
Federal Reserve on Wednesday signaled a higher bar to further
monetary easing.
Spot gold XAU= rose 0.5% to $1,500.55 per ounce at 1:50
p.m. EDT (1750 GMT). U.S. gold futures GCcv1 settled down
about $9, or 0.6%, to $1,506.20 an ounce.
"The dollar has started to come off and provide some relief
(to gold prices) and if so, you're going to see some buying come
in, prices of gold will move higher," said Alex Turro, market
strategist at RJO Futures.
"The outlook as far as Fed Chairman (Jerome) Powell and the
Fed is concerned, you're going to be looking out to October. The
committee was divided, the rhetoric really didn't provide a
clear path moving forward as far as the economy is concerned."
The Fed cut interest rates for the second time this year on
Wednesday to help sustain economic expansion but gave mixed
signals on future rate cuts.
Helping bullion, the dollar index .DXY dipped against a
major basket of currencies, as it struggled to gain in the face
of the less dovish Fed meeting. USD/
"They cut rates, the messaging was a little bit more hawkish
than the market is anticipating. A major portion of the market
is expecting a cut in October or, at least one more before the
year end," said Ryan McKay, a commodity strategist at TD
Securities.
Central banks from around the world face increasing pressure
to offer monetary support as the U.S.-China trade war hurts
global growth.
Gold also witnessed some safe-haven demand after Iran warned
the United States against any direct combat in the Middle East
following an attack on Saudi oil facilities that Washington and
Riyadh blamed on Tehran. However, capping gains in bullion, a triptych of U.S.
economic data on Thursday surprised to the upside, with existing
home sales, jobless claims and Philly Fed reports all rosier
than economists expected. Separately, palladium XPD= climbed 2.1% to $1,623.94,
after touching a record peak of $1,627.75 earlier in the
session.
"Palladium is getting an extra bit of the bid as the market
becomes less worried about the industrial outlook," TD
Securities' McKay said.
"The overall optimism on trade has people less concerned on
the industrial front but ultimately the positive precious metals
environment continues throughout the whole bunch."
U.S. and Chinese deputy trade negotiators were set to resume
talks for the first time in nearly two months on Thursday.
Silver XAG= was up 0.5% to $17.83 an ounce, while platinum
XPT= rose 1.2% to $941.45.