PRECIOUS-Gold eases as trade progress weighs on safety demand

K. Sathya Narayanan

(Adds comments, updates prices)

* U.S. GDP data due at 1330 GMT

* Palladium on track for fifth straight week of gains

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

Dec 20 (Reuters) - Gold inched lower on Friday as demand for riskier assets improved on optimism that the bitter U.S.-China trade war will be resolved soon, while investors awaited U.S. GDP data for more cues on the health of the economy.

ounce. "There has been a good set of economic data released recently. The equity market is still going strong and the sentiment is more risk-on. So, people are just prepared to go for some more risky assets and reduce their gold positions," said SP Angel analyst Sergey Raevskiy. World stocks touched record highs after the United States and China agreed an initial trade deal, while the U.S. dollar was holding close to a one-week peak scaled in the previous session. U.S. Treasury Secretary Steven Mnuchin said on Thursday the two countries would sign their so-called phase one trade pact at the beginning of January, adding that it would not be subject to any renegotiation. China's finance ministry unveiled a new list of import tariff exemptions for a duration of one year starting Dec. 26 for six chemical and oil products from the United States.

"Any news about the deal is better than no news about it... people are still waiting for more to come. It is being considered as the first step for a bigger agreement and it is a step in the right direction," Raevskiy added. Data on Thursday showed the initial U.S. jobless claims report was strong with applications for unemployment benefits slipping from a more than two-year high. Investors now await U.S. gross domestic product data due out later on Friday. "Key factors to watch for gold next year will be the second phase of the U.S.-China trade negotiations, the U.S. election, global monetary policy, and the investor response to these developments," Standard Chartered Bank analyst Suki Cooper said in a note.

ounce and was on track for a fifth straight week of gains. The autocatalyst metal had hit an all-time peak of $1,998.43 earlier this week on a sustained supply crunch, which was aggravated after recent mine closures in major producer South Africa.

were on track for a weekly gain.

(Reporting by K. Sathya Narayanan in Bengaluru; Editing by Emelia Sithole-Matarise)