PRECIOUS-Gold steady as trade optimism ebbs, palladium hits record high

(Adds details, updates prices)
* Palladium hits record high of $1,726.74/oz

By Karthika Suresh Namboothiri
Oct 15 (Reuters) - Gold held steady on Tuesday as optimism
surrounding U.S.-China trade talks faded and investors awaited
the outcome of crucial discussions that will determine how
Britain leaves the European Union, while deficit-hit palladium
touched a record high.
Spot gold XAU= edged down 0.1% to $1,490.70 per ounce as
of 0711 GMT. U.S. gold futures GCcv1 were 0.2% lower at
$1,494.80 per ounce.
"Markets enjoyed a good risk-on rally, but on Monday news
came out saying that China required more negotiation and talks
before they find any deal, which is very disappointing," said
Margaret Yang Yan, a market analyst at CMC Markets.
A Bloomberg report on Monday, citing sources, said China
wants more talks as soon as the end of October to hammer out the
details of U.S. President Donald Trump's phase 1 deal before
Chinese President Xi Jinping agrees to sign it. Sombre data from China reinforced the case for Beijing to
unveil further stimulus as manufacturing cools on weak demand
and U.S. trade pressures. China's factory gate prices declined
at the fastest pace in more than three years in September.
Late on Friday, the United States outlined the first phase
of a trade deal and suspended this week's scheduled tariff hikes
on Chinese goods, but existing tariffs remained in place and
officials on both sides said much more work was needed before an
accord could be agreed.
Asian stocks and Wall Street futures inched higher as some
investors held out hope that Britain still had a chance to avoid
a messy exit from the European Union. MKTS/GLOB
Officials from Britain and the EU will meet at a
make-or-break summit on Thursday and Friday that will determine
whether Britain is headed for a so-called no-deal Brexit.
"The Brexit narrative seems to be playing as a basic risk
on/off catalyst, with echoes into bond yields driving near-term
gold swings," said Ilya Spivak, a senior currency strategist at
DailyFx.
"The markets remain priced for a far more dovish Fed outlook
than the central bank has signed up for."
The U.S. Federal Reserve will meet later in the month and
the markets are on the lookout for signs the central bank will
cut interest rates, earlier than the expected December cut.
Palladium XPD= jumped to a peak of $1,726.74 an ounce.
Concerns that supply of the metal used in car exhaust systems
could run out has helped lift prices more than 36% this year.
Silver XAG= dropped 0.2% to $17.61 per ounce and platinum
XPT= declined 0.1% to $891.77.