* Dollar gains after Fed minutes
* Profit-taking weighs on palladium after record surge
* Investors focus on U.S.-China trade talks
* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl
By K. Sathya Narayanan
Feb 21 (Reuters) - Gold slipped on Thursday from a 10-month high hit in the previous session after minutes from the U.S. Federal Reserve's last meeting kindled expectations of an interest rate hike this year, while palladium fell from an all-time peak.
Spot gold was down 0.2 percent at $1,335.60 per ounce at 1317 GMT, having hit its highest since April 19 in the previous session at $1,346.73.
U.S. gold futures fell 0.7 percent to $1,338.20 per ounce.
"The Fed minutes have taken some of the dovishness out of the market and (that) is causing a slight softening in gold," Capital Economics analyst Ross Strachan said.
In the minutes of its latest meeting, the Fed said the U.S. economy and its labour market remained strong, prompting some expectations of at least one more rate hike this year. Higher rates tend to weigh on non-yielding gold.
The dollar gained versus major currencies following the minutes, further denting gold's appeal.
Morgan Stanley said in a note gold would need more than just a weaker dollar and a dovish stance from the Fed to drive its price higher, adding that the bank had closed its long position in the metal.
Investors also kept a close eye on talks to end a trade dispute between China and the United States.
Gold prices have gained 4 percent so far this year on expectations the U.S. central bank will pause its interest rate hiking cycle, and on hopes for a trade deal between the world's two largest economies.
Meanwhile, palladium fell 0.8 percent to $1,476.13 per ounce after the autocatalyst metal briefly surpassed the $1,500 level on Wednesday.
"Palladium touched $1,500 and that has attracted some profit taking in the short term, but the overall fundamental outlook remains the same," Saxo Bank analyst Ole Hansen said.
"The market is troubled by a lack of supply at a time when the emission standards are being tightened, and any correction at this stage will be looked upon as a potential buying opportunity," he said.
The supply deficit is likely to widen this year as stricter emissions standards increase demand for catalytic converters, autocatalyst manufacturer Johnson Matthey said last week.
While prices have risen, holdings of palladium-backed exchange traded funds (ETFs) are now below 800,000 ounces compared with 1.3 million ounces in early 2018.
"Since physical metal is in strong demand, it may have forced some closure of holdings," Hansen said.
Among other precious metals, platinum dipped 0.5 percent to $818.50, while silver fell 0.6 percent to $15.93.
Reporting by Arijit Bose and K. Sathya Narayanan in Bengaluru; Editing by Edmund Blair and Jan Harvey