The under-17s were at Spurs Lodge and, despite putting on a good show, failed to recover from conceding a goal in the first minute.
"I'm not disappointed," reflected boss Jimmy Neighbour. "I think the boys played very well actually.
"We gave a silly goal away in the first 20 seconds from a bad back pass, which was very negative at the time considering the state of the ground - it was a bit icy.
"We never really recovered from that, we created quite a few chances and passed the ball well - we just couldn't finish."
Jimmy added that he is more than satisfied with the opening phase of the season and hopes for more of the same in the second.
"I am not unhappy with the boys, they've had a good first half to the season. Most of them are improving which is what it is all about and I'm really delighted with them at the moment.
"I said to the boys that if they can have as good a second half and improve as much as they have in the first, then I think we'll be delighted - whether we win, draw or lose.
"It's about about progression of the kids, and most of them have progressed, which is the important thing for the football club. They are a good bunch of kids and are a delight to work with."
Team: Rutherford, Tyrie, McKie, Barnett, Foster, Black, Noto, Wettner, Malcolm, Yeates (Price 45), Ford (Seitz 70). Subs: Perry, Dobson, Hicks.
The under-19s were also unfortunate to take nothing from a game in which they put on a good performance. They fell behind despite dominating passages of the game, levelled the scores, but were then hit with a late sucker punch.
"It was disappointing," said Pat Holland. "We had really good spells of play, in the first half we were excellent - I was really pleased for the lads.
"We just couldn't put the ball in the net. It was just a question of maintaining it and it was a bit of a knockback when they got their first goal after about 65 minutes.
"It set us back a bit but, in fairness to the boys, they rallied and got an excellent goal.
"The keeper made a few excellent saves in the game for them, but Jamie Slabber got a header in and he just touched it onto the post. It was an excellent save, but John Sutton was alive to it and put it across the line.
"You thought really that would be it or we'd nick one, but with two minutes to go we gave a needless free-kick away on the edge of the box, they floated it in and Mark Hughes headed it onto their chaps' head and it's gone in the net.
"It was an absolute gutter!
"The performance was as good as I've seen from kids, so to lose was disappointing even though Palace are a good side."
Team: Jalal, Kelly, Herron, Bowditch, Henry, O'Donoghue, Marney, Hughes, Sutton, Slabber, Galbraith. Subs: Lee, Burch, Gardner.
Both our under-19 and under-17 Academy sides suffered a defeat to Crystal Palace in their last games before the Christmas break.