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PRECIOUS-Gold steady as softer dollar counters optimism on trade and Brexit talks

Arpan Varghese

talks@ (Adds details and comments, updates prices)

* Gold on track for a weekly decline of 0.6%

* Palladium hits record high of $1,705.84/oz

Oct 11 (Reuters) - Gold prices held steady on Friday as support from a weaker dollar was offset by optimism over talks on U.S.-China trade ties and a Brexit deal, but were on track to post a weekly loss, while palladium climbed to a new record peak.

Spot gold was steady at $1,493.52 per ounce at 1019 GMT, and were set to post a weekly decline of about 0.6%.

U.S. gold futures was down 0.2% at $1,498.20.

The dollar, which has emerged as an alternative safe-haven during the U.S.-China trade war, was a shade weaker versus its rivals.

INTL FCStone analyst Rhona O'Connell said any increased investor risk appetite, which would hit gold, was being countered by the weaker dollar.

"It (gold) seems to be concentrating on $1,500."

European stocks rose on optimism around the latest Brexit discussions and U.S.-China trade talks.

The chief Brexit negotiators of the EU and Britain met on Friday, hours after Prime Minister Boris Johnson and his Irish counterpart unexpectedly said they had found a pathway to a possible deal at last-ditch talks.

Meanwhile appetite for riskier bets also got a boost after U.S. President Donald Trump called the first day of trade talks with China in over two months "very, very good" on Thursday.

The talks between U.S. and Chinese negotiators fed hopes that the two sides could dial down the 15-month trade war that has upset financial markets and supply chains across the world, and delay a U.S. tariff hike scheduled for next week.

Meanwhile, an attack on an Iranian-owned oil tanker on Friday added to the global geopolitical uncertainty . The vessel was struck by two missiles off the Saudi port of Jeddah, Iranian state television said.

"While there is a little bit of uncertainty with the oil tanker (incident) resulting in some upward pressure for gold, a weaker dollar and lower U.S. yields are most dominant drivers right now," ABN Amro analyst Georgette Boele said.

"People are very long and they are still at the moment buying on the dips, below $1,500."

Elsewhere, deficit-hit palladium gained 0.3% to $1,703.78 an ounce, having hit a record peak of $1,705.84 earlier in the session. It was on track for a weekly gain of more than 2%.

Platinum was up 0.5% to $904.04 an ounce, while silver climbed 0.6% to $17.59. (Reporting by Eileen Soreng and Arpan Varghese in Bengaluru; Editing by Pravin Char)