BENGALURU - Palladium scaled a new peak on Thursday, driven by a deficit in the auto-catalyst metal and robust demand, while gold held firm on concerns surrounding a U.S. government logjam and Brexit.
Spot palladium had jumped 2.5 percent to $1,393 per ounce as of 1108 GMT, having hit an all-time high of $1,397.50, and rising more than 10 percent so far this month.
"Any new high in the market is triggering additional buying ... It is a good old-fashioned squeeze driven by tight fundamentals, strong momentum and low liquidity," Saxo Bank analyst Ole Hansen said.
The price of palladium, used mainly in emissions-reducing catalysts for vehicles, has leapt more than 60 percent since hitting a trough in mid-August. The metal overtook gold in price terms for the first time in 16 years late last year.
Meanwhile, holdings in palladium exchange-traded funds (ETFs) tracked by Reuters have nearly halved from January last year as prices rose.
"There is not sufficient supply in the market, so people are purchasing metals from the ETFs," said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.
Gold held firm, up 0.1 percent at $1,294.04 per ounce, supported by weakness in stock markets due to concern over China's economic outlook and possible U.S. tariffs on European cars.
U.S. gold futures were unchanged at $1,293.70.
"Gold is looking for the next short-term stimulus ... On the next occasion we see a sustained equity market pull-back, you're likely to see a movement above $1,300," Capital Economics analyst Ross Strachan said.
Spot gold is about to exit a neutral range of $1,285-$1,299, and either rise to $1,311 or drop towards $1,268, according to Reuters technical analyst Wang Tao.
Gold remains supported by a variety of factors, including a prolonged partial U.S. government shutdown, a possible pause in the U.S. Federal Reserve's rate hike cycle, and concerns surrounding Brexit, analysts said.
In other metals, platinum fell 0.4 percent to $801 an ounce, while silver edged 0.1 percent lower to $15.58.