* Palladium rises for the fourth straight week
* The Caixin/Markit Manufacturing PMI for Oct. rises
* Applications for unemployment benefits in U.S. rises (Adds comments, details; updates prices)
Nov 1 (Reuters) - Gold fell on Friday as investors booked profit after strong Chinese factory data shaved fears of an economic slowdown, but the metal was set for a second weekly gain as the uncertainty surrounding a U.S.-China trade deal boosted safe-haven appeal.
Spot gold fell 0.2% to $1,510.70 per ounce at 0524 GMT, while U.S. gold futures were down 0.1% at $1,513.10 per ounce. But spot gold is set to rise 0.5% on a weekly basis, after a 1% gain the previous week.
"We are seeing a little bit of profit booking in gold this morning after the strong China manufacturing data but I don't see gold falling below $1,460 as the fundamentals still look quite strong," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
China's factory activity expanded at the fastest pace in over two years in October as new export orders rose and plants ramped up production, a private business survey showed on Friday.
The better-than-expected results stand in contrast with an official survey published on Thursday, which showed China's factory activity shrank for the sixth straight month in October.
Meanwhile, the U.S. Federal Reserve on Wednesday lowered its policy rate by a quarter of a percentage point. But the central bank signalled there would be no further cuts unless the economy takes a turn for the worse.
"The gold market looks pretty strong in the near-term given fresh uncertainty around the trade war and economic data from the U.S. confirming the slowdown still lingering," said Janie Simpson, managing director at ABC Bullion.
"Considering the economic slowdown still existing, investors are expecting more rate cuts even though the Fed has pushed a pause button on it."
A flattening yield curve indicates market participants believe the U.S. Federal Reserve may be pausing its interest rate cuts too soon.
Chile's decision to cancel the Nov. 16-17 Asia-Pacific Economic Cooperation summit disrupted plans for the United States and China to sign an interim trade deal, but U.S. President Donald Trump said the two countries would soon announce a new site to sign a "Phase One" trade agreement.
A near 16-month long trade war between the two economies has slowed global trade, stirred recession fears for some economies and roiled financial markets.
Asian shares fell on Friday on fresh concerns over Sino-U.S. trade prospects and ahead of U.S. economic data, while the dollar eased against major rivals.
Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust, fell 0.19% on Wednesday from Tuesday.
Among other metals, Silver fell 0.4% to $18.05 per ounce, platinum was down 0.2% at $930.25 per ounce. while palladium was flat at $1,793.28. Palladium set to record its fourth straight week of gains. (Reporting by Diptendu Lahiri in Bengaluru; Editing by Rashmi Aich)