 After a 2003 friendly match between Olimpia and Chilean powerhouse Colo-Colo, Iván Zamorano (then a Colo-Colo player) recommended him for the Chilean club; however, both teams failed to reach an agreement despite Colo-Colo having registered the player, and Palacios remained in Olimpia.He joined Marathón in May 2007, but left them in summer 2009 for a short spell at Olimpia only to return to Marathón the same year.In December 2010 he returned to Victoria.