PRECIOUS-Gold steadies before Brexit summit, palladium hits record high

(Updates prices)
* Palladium hits record high of $1,730.08/oz
* Britain and EU to meet at summit starting Thursday

By Sumita Layek
Oct 15 (Reuters) - Gold steadied on Tuesday, moving in a
tight range, after hopes of progress in U.S-China trade talks
were tempered and ahead of a summit that will determine how
Britain leaves the European Union.
Palladium hit a record high, continuing its stellar run
driven by a sustained supply crunch.
Spot gold XAU= was little changed at $1,492.91 per ounce
as of 1211 GMT. U.S. gold futures GCcv1 was flat at $1,497.20.
"We've had the initial lukewarm response to phase one of the
trade deal ... the risk of profit-taking in gold has not really
emerged. We're still holding onto levels not far from the $1,500
area," Saxo Bank commodity strategist Ole Hansen said.
"We continue to trade sideways, waiting for the next driver,
and right now the market is not providing much in terms of
direction."
The United States on Friday outlined the first phase of a
trade deal and suspended this week's scheduled tariff hikes on
Chinese goods. Bloomberg reported on Monday that China wanted
more talks to hammer out the details of the phase-one deal
before signing it. Meanwhile, European stocks climbed to two-week highs as
investors cheered comments from the EU's chief Brexit negotiator
that a deal with Britain over the terms of their divorce was
still possible this week. .EU MKTS/GLOB
Investors are keeping a close eye on a make-or-break summit
between Britain and the EU on Thursday and Friday that will
determine whether Britain is headed for a deal to leave the bloc
on Oct. 31, a disorderly no-deal exit or a delay.
"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 U.S.
Federal Reserve outlook than the central bank has signed up
for."
The Fed meets at the end of the month to decide on whether
to implement further rate cuts.
Palladium XPD= was up 0.3% at $1,719.64 an ounce, after
hitting a record $1,730.08. The metal used in vehicle exhausts
to reduce harmful emissions has rallied more than $300 since
early August, when it touched a near two-month low.
"Palladium is one of the few commodities in the market right
now where we've got a strong momentum and strong fundamentals
both supporting prices," Saxo Bank's Hansen said.
Silver XAG= fell 0.3% at $17.60 per ounce and platinum
XPT= rose 0.1% to $894.08.