(Adds graphic, updates prices)
* Palladium hits record high of $1,739.93/oz
* Britain and EU to meet at summit starting Thursday
* Gold priced in sterling dips to 2-1/2 month low
By Asha Sistla
Oct 15 (Reuters) - Gold fell 1% on Tuesday as growing risk
appetite boosted investor demand for equities, while a sustained
supply crunch in palladium propelled the price of that precious
metal to a record high.
Spot gold XAU= fell 0.8% to $1,481.40 per ounce as of
2:35 p.m. EDT (1835 GMT), having slipped 1% earlier in the
session.
U.S. gold futures GCcv1 settled down 0.9% at $1,483.50.
"Right now what's pushing it (gold) down is the stocks. We
have earnings coming out now and stocks look strong. There is no
risk aversion right now," said Bob Haberkorn, senior market
strategist at RJO Futures.
U.S. equity markets rose on strong earnings reports, even as
optimism faded over the latest China-U.S. trade truce. .N
"Gold needs a headline to push it higher; the U.S. Federal
Reserve to talk about rate cuts or something to happen on the
trade talks. If the deal falls apart and the Fed cuts rates,
gold will go up," RJO Futures' Haberkorn added.
The U.S. Federal Reserve meets at the end of the month to
decide on whether to implement further interest rate cuts.
FEDWATCH
Bloomberg reported on Monday that China wanted more talks to
hammer out details of the phase-one deal before signing it.
Investors are also watching a make-or-break summit between
Britain and the European Union 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.
Gold denominated in sterling XAUGBP=R slid over 2% to its
lowest since end-July at 1,154.35 pounds an ounce.
Palladium XPD= extended its strong rally, gaining 1.1% to
$1,733.06 an ounce, after hitting a record $1,739.93. The metal,
used in vehicle exhaust systems to reduce harmful emissions, has
rallied more than $300 since early August, when it touched the
lowest in nearly two months.
"Palladium is in short supply. It will continue to be so and
higher prices maybe till $2,000 is well within the realm of
possibilities, particularly if we see automotive activity
rebound a bit," said Bart Melek, head of commodity strategies at
TD Securities in Toronto.
"We have a structural deficit problem within the palladium
market. The inventories and exchange traded funds which have
been used over the years to feed the gap between primary supply
and demand are down."
Among other metals, silver XAG= fell 1.4% to $17.40 per
ounce, while platinum XPT= fell 1.2% to $882.08.
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