NEW YORK: Deficit-stricken palladium scaled a record peak on Monday, while gold held steady as investors awaited policy cues from the Federal Reserve’s meeting this week.

Palladium was up 1.7% to $2,903.77 per ounce by 1:43 p.m. EDT (1743 GMT) after hitting an all-time high of $2,941.

The metal, used in emissions-reducing catalysts in automobiles, has risen about 19% so far this year.

Palladium could remain heavily undersupplied in 2021 even with Russia’s Nornickel having scaled back production losses, said Standard Chartered analyst Suki Cooper. She forecast average prices of $2,800 per ounce in the second quarter, saying it was likely to be the “tightest period.”

“While the speed of vaccine rollout is a key differentiator of near-term growth prospects, the recovery of auto sales across key regions such as the US and China bodes well for palladium demand, but is set to keep the market balance tight,” Cooper added.

Spot gold rose 0.1% to $1,779.20 per ounce and US gold futures settled 0.1% higher at $1,780.10.

“The (gold) market just wants to get past FOMC to see what they have to say about inflation,” said Bob Haberkorn, senior market strategist at RJO Futures.

Traders would also focus on the Fed’s long-term outlook on interest rates and “their plan of action on short-term rates,” Haberkorn added.

The Fed meeting will begin on Tuesday, with investors’ attention focused particularly on what Fed Chair Jerome Powell will say in his post-meeting news conference on Wednesday.

The dollar and US Treasury yields were steady. Bullion has dropped more than 6% so far this year, mostly pressured by rising yields.

“A break above the $1,800 level, however, may probably require the 10Y yield to trade below 1.55%,” analysts at OCBC said in a note.

Silver gained 0.7% to $26.17 per ounce, while platinum advanced 0.8% to $1,239.27.