PRECIOUS-Gold slides as safe-haven demand dips on Brexit, Sino-U.S. trade hopes

(Adds comments, updates prices)
* Gold denominated in pounds falls over 2%
* Gold declines about 1% so far this week
* Palladium hits record high of $1,705.84/oz

By Asha Sistla
Oct 11 (Reuters) - Gold prices fell 1% on Friday, on track
for a weekly loss, as optimism around the U.S.-China trade talks
and the possibility of a Brexit deal diminished some save-haven
interest in bullion, while palladium scaled a new record peak.
Spot gold XAU= fell 0.6% to $1,485.53 per ounce at 1323
GMT, after touching their lowest in over week at $1,479.31,
heading towards a weekly decline of about 1%. U.S. gold futures
GCcv1 slid 0.7% to $1,490.20.
"Optimism over the U.S.-China trade situation has fueled a
stock market rally, which is the reason for gold underperforming
in the last couple of days," said Fawad Razaqzada, market
analyst with Forex.com.
"But I don't see a massive sell-off in gold on the back of a
trade deal if there is one, it would actually be positive in
(the) long term. If China gets a deal, Chinese demand for gold
should rise as it is the largest gold consumer in the world."
Global shares basked in optimism over signs of a detente in
the U.S.-China trade war and hopes that Britain was moving
closer to a smooth exit from the European Union. MKTS/GLOB
The talks between U.S. and Chinese negotiators fed hopes
that the two sides could dial down the 15-month dispute and
delay a U.S. tariff hike scheduled for next week. "The precious metals complex is under pressure from trade
optimism. ... Further, as Brexit edges closer to a resolution,
the market's sense of uncertainty may be waning and sapping some
safe haven interest from the complex," TD Securities said in a
note.
The chief Brexit negotiators of the EU and Britain met on
Friday, hours after Prime Minister Boris Johnson and his Irish
counterpart unexpectedly said they had found a pathway to a
possible deal at last-ditch talks. Gold denominated in sterling XAUGBP=R slid about 2.5% to
1,168.35 pounds an ounce.
Gold investors were also watching for fallout from an attack
on an Iranian-owned oil tanker on Friday that added to global
geopolitical uncertainty. The vessel was struck by two missiles
in the Red Sea off Saudi Arabia's coast, Iranian state
television said. "People are very long and they are still at the moment
buying on the dips, below $1,500," ABN Amro analyst Georgette
Boele said, adding that the oil tanker incident added a bit of
uncertainty, lending some support to gold.
Elsewhere, deficit-hit palladium rose 0.1% to $1,701.39 an
ounce, having hit a record peak of $1,705.84 earlier in the
session. It gained about 2% so far this week.
Platinum XPT= fell 1.5% to $885.58 an ounce, while silver
XAG= climbed 0.3% to $17.54.