(Adds comments, updates prices)
* Gold denominated in pounds falls over 2%
* Gold declines about 1% so far this week
* Palladium hits record high of $1,705.84/ozBy Asha SistlaOct 11 (Reuters) - Gold prices fell 1% on Friday, on trackfor a weekly loss, as optimism around the U.S.-China trade talksand the possibility of a Brexit deal diminished some save-haveninterest inbullion, while palladium scaled a new record peak.Spot gold fell 0.6% to $1,485.53 per ounce at 1323GMT, after touching their lowest in over week at $1,479.31,heading towards a weekly decline of about 1%. U.S. gold futures slid 0.7% to $1,490.20."Optimism over the U.S.-China trade situation has fueled astock market rally, which is the reason for gold underperformingin the last couple of days," said Fawad Razaqzada, marketanalyst with Forex.com."But I don't see a massive sell-off in gold on the back of atrade deal if there is one, it would actually be positive in(the) long term. If China gets a deal, Chinese demand for goldshould rise as it is the largest gold consumer in the world."
Global shares basked in optimism over signs of a detente inthe U.S.-China trade war and hopes that Britain was movingcloser to a smooth exit from the European Union. The talks between U.S. and Chinese negotiators fed hopesthat the two sides could dial down the 15-month dispute anddelay a U.S. tariff hike scheduled for next week. "The precious metals complex is under pressure from tradeoptimism. ... Further, as Brexit edges closer to a resolution,the market's sense of uncertainty may be waning and sapping somesafe haven interest from the complex," TD Securities said in anote.The chief Brexit negotiators of the EU and Britain met onFriday, hours after Prime Minister Boris Johnson and his Irishcounterpart unexpectedly said they had found a pathway to apossible deal at last-ditch talks. Gold denominated in sterling slid about 2.5% to1,168.35 pounds an ounce.Gold investors were also watching for fallout from an attackon an Iranian-owned oil tanker on Friday that added to globalgeopolitical uncertainty. The vessel was struck by two missiles
in the Red Sea off Saudi Arabia's coast, Iranian statetelevision said. "People are very long and they are still at the momentbuying on the dips, below $1,500," ABN Amro analyst GeorgetteBoele said, adding that the oil tanker incident added a bit ofuncertainty, lending some support to gold.Elsewhere, deficit-hit palladium rose 0.1% to $1,701.39 anounce, having hit a record peak of $1,705.84 earlier in thesession. It gained about 2% so far this week.Platinum fell 1.5% to $885.58 an ounce, while silver climbed 0.3% to $17.54. (Reporting by Eileen Soreng and Arpan Varghese in Bengaluru;Editing by Pravin Char and Emelia Sithole-Matarise)