Foot Mercato says Palace are discussing a move for the former Chelsea starlet.
Lyon president Jean-Michel Aulas is prepared to sell, as he needs to make several quick sales to balance the books.
Aulas has authorised a move for Palace defender Mamadou Sakho, which has opened the door to the prospect of negotiations also being held for Traore.
For the moment, Palace are only at the discussion stage and are yet to sound out Aulas about a price for Burkina Faso international Traore.
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