PRECIOUS-Gold edges higher as softer dollar, Gulf tensions lend support

* Spot gold stuck in narrow range of $1,488-$1,514/oz
-technicals
* Palladium scales record peak of $1,646.81/oz
* Dollar gives up gains against most major currencies

(Updates prices)
By Eileen Soreng
Sept 20 (Reuters) - Gold prices rose on Friday and were
headed for their first weekly gain in a month, supported by a
softer dollar, tensions in the Middle East and caution about
Sino-U.S. trade talks, while palladium climbed to a fresh record
peak.
Spot gold XAU= was up 0.3% at $1,503.36 per ounce, as of
0800 GMT, up about 1% this week. U.S. gold futures GCv1 were
up 0.5% at $1,513.5 per ounce.
"A weaker U.S. dollar is giving gold a little bit of an
upward drift," said Michael McCarthy, chief market strategist at
CMC Markets, adding that "prices are still very much in the
middle of a trading range and pinned to $1,500 level."
The dollar slipped on Friday and was headed for a third
straight week of losses as central banks in Japan, the UK and
Switzerland refrained from cutting rates. USD/
"Investors are all waiting on any further developments in
the trade negotiations as they move towards October meeting and
that may provide next big driver for gold prices," McCarthy
said.
U.S. and Chinese deputy trade negotiators resumed
face-to-face talks for the first time in nearly two months on
Thursday, trying to lay the groundwork for high-level talks in
early October. Gold prices have risen about 17% this year mainly on
U.S.-China trade tensions, concerns over the global economic
growth outlook and prospects of monetary easing by central
banks.
The Fed cut interest rates for the second time this year on
Wednesday to help sustain economic expansion but gave mixed
signals on future rate cuts. Also, giving bullion a lift were tensions in the Middle East
as the United States said on Thursday it was building a
coalition to deter Iranian threats following a weekend attack on
Saudi Arabian oil facilities. The strategy for retaliation against the attacks on Saudi
oil plants is not clear and the uncertainties are keeping gold's
safe-haven bid intact, said Vandana Bharti, assistant
vice-president of commodity research at SMC Comtrade.
On the technical front, signals are mixed for spot gold as
it is stuck in a narrow range of $1,488-$1,514 per ounce,
according to Reuters technical analyst Wang Tao. Elsewhere, palladium XPD= rose 1% to $1,640.15 per ounce,
having hit a record peak of $1,646.81. Prices were up 2% for the
week in a seventh straight weekly gain.
Platinum XPT= and silver XAG= were up 0.7% at $943.52
and $17.89 per ounce, respectively.