(Adds details, comments; updates prices)
* Markets eye UK election and ECB policy meeting
* Palladium hits fresh record high at $1,931.50
* Fed holds borrowing rate between 1.50% and 1.75%
By Diptendu Lahiri
Dec 12 (Reuters) - Gold was steady on Thursday as investors
waited to see if new U.S. tariffs on Chinese goods would emerge
by a Dec. 15 deadline and after the Federal Reserve's decision
to leave interest rates unchanged.
Palladium meanwhile soared to yet another record high on a
sustained supply shortfall.
Spot gold XAU= was little changed at $1,474.40 an ounce
by 1118 GMT while U.S. gold futures GCcv1 rose 0.3% to
$1,479.10.
"The slight fall in gold can be attributed to profit-taking
after the Fed decided to keep rates on hold, but the change is
minimal as investors are still cautious about what will happen
on Dec. 15," said Mitsubishi analyst Jonathan Butler.
The policy decision left the U.S. Fed's benchmark overnight
lending rate in its current target range between 1.50% and
1.75%, three-quarters of a percentage point below where it
started the year. Higher U.S. interest rates weigh on non-yielding bullion by
increasing its opportunity cost.
However, "with the Fed possibly expanding the balance sheet
again in 2020 ... gold should be a regular feature in one's
asset allocation during periods of market uncertainty,
especially when interest rates are low," AxiTrader market
strategist Stephen Innes said in a note.
U.S. President Donald Trump is expected to meet top advisers
on Thursday about trade and the Dec. 15 deadline for new tariffs
on nearly $160 billion worth of Chinese consumer goods, three
sources familiar with the plans said. Investors should hold on to gold in the longer term as
prices could see more support as we get closer to the
second-phase of the trade deal, which will have more complex
factors to be considered, Mitsubishi's Butler said.
Markets were also focused on the UK election, which could
pave the way for Britain's departure from the European Union,
and Christine Lagarde's first meeting of the European Central
Bank later in the day. Gold is considered a safe-haven investment during political
and financial uncertainty.
Elsewhere, autocatalyst metal palladium XPD= was up about
1% at $1,928.04 an ounce, having earlier hit a record high of
$1,931.50.
The metal surpassed $1,900 for the first time on Tuesday as
mines in major producer South Africa shut after flooding
triggered severe power blackouts. "Even after the mines open in South Africa, palladium prices
are not expected to correct much. It rather has a high potential
to hit $2,000 soon," Butler added.
Platinum XPT= edged up 0.3% to $941.89, while silver
XAG= was little changed at $16.86.