PRECIOUS-Scarce palladium scales $1,800/oz peak; gold dips as equities soar

* S&P 500 stock index opens at record high
* Traders see 90.9% chance for 25 bps U.S. rate cut

(Updates prices)
By Asha Sistla
Oct 28 (Reuters) - Palladium soared on Monday to hit $1,800
an ounce for the first time ever, extending a record run
triggered by a stark supply shortfall, while gold fell nearly 1%
on optimism surrounding a U.S.-China deal that pushed stocks to
a fresh peak.
Palladium XPD= rose 2.1% to $1,800.84 per ounce as of 1:47
p.m. EDT (1747 GMT), having hit a record high of $1,808.81.
The metal has climbed about 43% so far this year.
"There's just a persistent, continuing shortage of the
metal," said Tai Wong, head of base and precious metals
derivatives trading at BMO.
"The sharp rally does suggest a correction at some stage but
the outlook is robust. Palladium could even hit $2,000 next
year; perhaps even higher, but the path is unlikely to be
smooth."
Gaping supply shortages will see palladium cement its price
premium over platinum next year, a Reuters survey showed.
PREC/POLL
Chiefly used in vehicle exhausts to reduce harmful
emissions, platinum is favoured for diesel engines and palladium
is preferred for gasoline engines.
Platinum XPT= fell about 1% to $917.39 per ounce.
Spot gold XAU= , meanwhile, was down 0.8% to $1,492.17 per
ounce, while U.S. gold futures GCv1 settled 0.6% lower at
$1,495.80.
"It's a risk-on sentiment - people are getting out of the
safe-haven trade, out of gold and going into equities," said
Phillip Streible, senior commodities strategist at RJO Futures.
U.S. stock markets, especially the S&P 500 that touched a
peak, were riding high on the advancing trade talks and stronger
earnings. .N
U.S. President Donald Trump said he expected to sign a
significant part of the trade deal with China ahead of schedule
after officials from both nations confirmed they were "close to
finalising" parts of the agreement on Friday. However, "both gold and silver are in near-term price
uptrends now. So the technical posture remains overall bullish.
That's going to limit selling pressure," RJO Futures' Streible
added.
Fragile global growth and the prospect of interest rates
staying lower for longer, boosting gold's appeal for nervous
investors, are behind upward revisions to price forecasts for
the bullion, a Reuters survey showed. PREC/POLL
Traders also awaited the Federal Reserve's Oct. 29-30
meeting, at which the U.S. central bank is widely expected to
cut interest rates for the third time this year. FEDWATCH
"If the Fed leans easy on monetary policy and surprises the
market a little, that's going to boost gold," said Jim Wyckoff,
senior analyst with Kitco Metals.
"If the Fed leans hawkish and maybe suggests that there may
not be anymore or few interest rate hikes in the coming months
or longer, that's going to be bearish for gold."
Silver XAG= dipped 0.9% to $17.86 per ounce.