Spot gold was trading flat at $1,497.81 per ounce, as of 0105 GMT.
Gold prices were little changed on Friday, on track for a third weekly decline as optimism over the U.S.-China trade talk fanned risk sentiment, while palladium hovered around a record peak on concerns about tight supplies of the autocatalyst metal.
* Spot gold was trading flat at $1,497.81 per ounce, as of 0105 GMT. Prices have dropped about 0.6% so far this week, poised for a third consecutive weekly decline.
* U.S. gold futures dropped 0.1% to $1,505.50. * Palladium hit a record peak of $1,621.55 on Thursday on concerns over tight supplies due to possible labour issues in South African mines.
* The metal dropped 0.5% to $1,609.85 in early trade.
* Hopes of progressing trade talks kept risk appetite up, after U.S. President Donald Trump said on Thursday he preferred a comprehensive trade deal with China but did not rule out the possibility of an interim pact, even as he said an “easy” agreement would not be possible.
* The two sides have been making conciliatory gestures ahead of the talks, lowering the temperature between them and cheering investors.
* Asian equities rose, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.2%, weighing on safe-haven gold.
* Elsewhere, European Central Bank chief Mario Draghi pledged indefinite stimulus on Thursday to revive an ailing euro zone economy.
* The bigger-than-expected stimulus will increase pressure on the U.S. Federal Reserve and Bank of Japan to ease policy next week to support a world economy increasingly characterised by low growth and protectionist threats to free trade.
* Meanwhile, U.S. underlying consumer prices increased solidly in August, leading to the largest annual gain in a year.
* The World Gold Council (WGC) on Thursday published a set of guidelines for gold miners, responding to rising pressure from consumers, NGOs and governments to ensure the gold market is free from criminality, rights abuses and benefits local communities.
* In Hong Kong, long-running and sometimes violent street protests are helping tarnish its lustre as the main physical gateway of gold to China, the world’s top bullion buyer.