PRECIOUS-Gold inches down as U.S.-China trade deal stokes risk-taking

(Updates prices)
* Palladium scales record high of $2,306.75/oz
* Platinum hits highest since January 2018
* SPDR Gold holdings rose 0.4% on Wednesday

By Sumita Layek
Jan 16 (Reuters) - Gold prices edged lower on Thursday, as
optimism over a preliminary trade deal between the United States
and China increased risk appetite, although concerns about
tariffs and unresolved core issues remained.
Among other precious metals, palladium scaled a record high,
while platinum jumped to its highest in nearly two years.
Spot gold XAU= fell 0.2% to $1,552.69 per ounce by 0752
GMT. U.S. gold futures GCv1 eased 0.1% to $1,553.10.
The much-awaited Phase 1 trade deal was signed by U.S.
President Donald Trump and Chinese Vice Premier Liu He on
Wednesday, defusing an 18-month-long row that has roiled global
markets. News in mid-December that a deal would be forthcoming had
sparked a strong rally in riskier assets.
"We are seeing a slight pullback in gold prices as markets
are relieved that a first phase of the trade deal is signed,"
said Ajay Kedia, director at Kedia Advisory in Mumbai.
Further weighing on gold prices, world stocks scaled record
levels as investors cheered the trade deal. MKTS/GLOB
However, analysts said the deal failed to address structural
economic issues that led to the conflict, did not fully
eliminate the tariffs that have slowed the global economy, and
set hard-to-achieve purchase targets. "Some people are disappointed because Trump didn't gain much
from the deal, compared to the huge uncertainty that he imposed
on the U.S. economy, farmers and workers," said Margaret Yang
Yan, a market analyst at CMC Markets.
Bullion, considered a safe asset in times of political and
economic uncertainty, gained 18% last year on the back of the
tariff war and its impact on global economy.
"No question the detente is favourable for risk, but the
agreement won't change the Federal Reserve's outlook and if
anything, it could lead Chair (Jerome) Powell to cut rates as
the economic impulse from the Phase 1 deal could be meek,"
Stephen Innes, a market strategist at AxiTrader, said in a note.
On Wednesday, the Fed expressed confidence that borrowing
costs are at the right level to sustain growth and lift
inflation to healthier levels. Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
Holdings of the world's largest gold-backed exchange-traded
fund SPDR Gold Trust GLD rose 0.43% to 878.32 tonnes on
Wednesday. GOL/ETF
Palladium XPD= gained 1.5% at $2,298.04 an ounce after
hitting a record peak of $2,306.75 earlier in the session.
Platinum XPT= was down 0.5% to $1,014.64 after hitting its
highest since January 2018 at $1,027.44 earlier, while silver
XAG= shed 0.7% to $17.86 per ounce.