NEW YORK (Reuters) - Gold surged past $1,500 an ounce and a gauge of global equity markets hovered near record highs on Tuesday in a year-end rally spurred by hopes of a U.S.-Sino Phase 1 trade deal and as China’s latest policy easing pledge added to investor optimism.

President Donald Trump said he and Chinese President Xi Jinping will sign the initial phase of the pending trade pact in a ceremony, the latest remarks by the U.S. leader to flag the deal is close to being finalized.

European stocks ground out fresh record gains as did the Nasdaq on Wall Street as equities remained on track to post their best year in a decade.

The pan-European STOXX 600 index .STOXX added 0.14% as it touched an all-time high and the domestically focused mid-cap index .FTMC in Britain rose 0.63% to hit a new high.

France's CAC 40 .FCHI and Spain's IBEX 35 .IBEX both closed little changed, while German, Italian and Swiss country indexes were closed for the day.

Blue-chip shares in China .CSI300 rose 0.7% after Premier Li Keqiang said the government was considering more measures to lower corporate financing costs and hinted at "targeted" cuts in banks' reserve requirement ratio.

Gold passing $1,500 was big news in a quiet Christmas Eve session as it suggested investors may be hedging against a possible inflation hike next year, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., December 17, 2019. REUTERS/Brendan McDermid

Arone said he doubted inflation will be strong enough to negatively affect the market, but it could provide a jolt to investors lulled by interest rates below the historic norm.

“Even today with lighter volumes and high absenteeism, gold has breached $1,500,” he said.

“To me it’s indicative of this idea that potentially you could have an inflation scare in 2020 and perhaps investors are beginning to position themselves for such a scare,” Arone said.

U.S. gold futures GCcv1 rose more than 1% to hit a high of $1,505.00 an ounce.

MSCI's gauge of stocks across the globe .MIWD00000PUS %, while its emerging market index lost 0.24%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 36.08 points, or 0.13%, to 28,515.45. The S&P 500 .SPX lost 0.63 points, or 0.02%, to 3,223.38 and the Nasdaq Composite .IXIC added 7.24 points, or 0.08%, to 8,952.88.

The dollar was little changed against the euro and Japanese yen in holiday-thinned trading and U.S. Treasury yields rose, bolstered by a strong auction of five-year notes. Euro zone bond markets were shut.

The dollar index .DXY rose 0.03%, with the euro EUR= down 0.03% to $1.1083. The yen JPY= strengthened 0.03% versus the greenback to 109.37 per dollar.

Benchmark 10-year notes US10YT=RR last rose 9/32 in price to yield 1.9031%.

Oil prices rose after Russia said cooperation with the Organization of the Petroleum Exporting Countries on supply cuts would continue and amid optimism that the United States and China could finalize the trade pact.

Brent crude LCOc1 settled up 81 cents at $67.20 a barrel, while U.S. West Texas Intermediate CLc1 rose 59 cents to settle at $61.11 a barrel.