PRECIOUS-Gold steadies as trade uncertainties linger

(Updates prices)
* Wall Street at record highs
* Palladium hits all-time high of $1,991.38/oz
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

By Karthika Suresh Namboothiri
Dec 16 (Reuters) - Gold held steady on Monday as the dollar
eased and investors sought clarity on the fine print of the
"phase one" U.S.-China trade deal, offsetting strong gains in
the equities markets.
Spot gold XAU= was little changed at $1,476.19 per ounce
by 01:35 p.m. ET (1835 GMT). Prices gained 1.1% last week as the
world's two largest economies negotiated ahead of another
potential round of tariffs.
U.S. gold futures GCcv1 settled mostly unchanged at
$1,480.50 per ounce.
"This (trade deal) does not mean things get fundamentally
better; it essentially means they're not going to get any deeper
into a slowdown. ... There still are risks down the road," said
Bart Melek, head of commodity strategies at TD Securities.
"A combination of expectations of high (trade) deficit,
lower interest rates and U.S. political risks emerging during
election year, all point to investors wanting to at least have
some gold in their portfolio."
Washington and Beijing cooled their tariff dispute last
week, reducing some U.S. tariffs in exchange for what U.S.
officials said would be a big jump in Chinese purchases of
American farm products and other goods. This bolstered risk sentiment, with Wall Street at record
highs. .N
However, the much-awaited initial deal failed to trigger any
sharp sell off in gold. It shook off some initial pressure from
early in the Asian session.
"The markets lack conviction to push bullion lower as there
still remain concerns about what this deal entails and how much
this phase one agreement will alleviate the downward pressure on
the global economy going into 2020," said FXTM market analyst
Han Tan.
"These overall concerns are still keeping gold prices
relatively elevated."
The 17-month long trade war has fanned concerns of a global
economic slowdown, prompting major central banks to ease
monetary policy. Palladium XPD= jumped 2.4% to $1,977.28 an ounce after
hitting a fresh record high of $1,991.38.
Platinum XPT= edged 0.1% higher to $928.93, while silver
XAG= gained 0.7% to $17.05.
While palladium's bull run has been underpinned by a
structural deficit, platinum has been in a surplus, Wall Street
bank Goldman Sachs said in a note.
"However, substitution of palladium for platinum is unlikely
to happen until extreme physical shortages develop which create
problems in producing automobiles to force the automakers to
make expensive investments to make the switch. Until then,
palladium will likely continue to outperform platinum."

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