PRECIOUS-Palladium eyes $1,900 in record surge; gold firms on trade doubts

(Updates prices)
* Palladium hits all-time high of $1,898.50/oz
* Palladium to be in deficit for foreseeable future- analyst
* FOMC meeting commences on Tuesday

By Eileen Soreng
Dec 9 (Reuters) - Palladium soared to a record just shy of
the $1,900 mark on Monday, while gold prices held steady as
uncertainty over U.S.-China trade talks took center stage ahead
of a Dec. 15 deadline for fresh U.S. tariffs.
Autocatalyst metal palladium XPD= climbed to an all-time
high of $1,898.50 an ounce and was last up 0.3% at $1,883.29 at
01:50 p.m. ET (1850 GMT)
"Palladium has a very strong fundamental backdrop with
supply set to stay quite scarce and demand growth set to
increase," said Daniel Ghali, commodity strategist at TD
Securities.
Palladium has risen nearly 50% in 2019 on a sustained supply
squeeze, and has constantly been breaking records, despite a
weakening global auto sector.
Increasingly stringent emissions regulations globally are
raising the palladium in autocatalysts for gasoline-powered cars
and 2020 could see the most number of regulations, Ghali added.
"There is a widespread expectation that (palladium) spot
prices are headed towards $2,000 and the market does currently
appear to be in a one-way street," INTL FCStone analyst Rhona
O'Connell said in a note.
"Even with the (auto) sector under pressure, palladium will
be in deficit for the foreseeable future and the funds are
chasing it higher."
Elsewhere, spot gold XAU= was steady at $1,459.52 per
ounce. U.S. gold futures GCcv1 settled mostly unchanged at
$1,464.90.
"The tariff deadline of Dec. 15 is certainly top of
everyone's mind ... The situation is still uncertain, helping
gold stay firm," TD Securities' Ghali said.
China said on Monday it hoped to make a trade deal with the
United States as soon as possible, as Washington's next round of
tariffs against Chinese goods is scheduled to take effect on
Dec. 15. Also supporting bullion, equity markets were further
pressured after China's exports shrank in November. MKTS/GLOB
Markets now await the U.S. Federal Reserve's two-day meeting
starting on Tuesday for cues on its monetary policy. The central
bank is expected to highlight the economy's resilience and keep
interest rates on hold in the range of 1.50% to 1.75%.
FEDWATCH
U.S. investment bank Goldman Sachs said investment demand
for gold would be supported by recession fears and political
uncertainty, forecasting prices at $1,600 an ounce over a three-
and 12-month period. Platinum XPT= eased 0.1% to $894.72 per ounce, while
silver XAG= edged 0.1% higher to $16.58.