AMSTERDAM/LONDON: Palladium prices scaled a record peak on Tuesday on persistent supply worries, while gold held a narrow range as investors awaited policy signals from the US Federal Reserve’s meeting this week.

Palladium hit a record high of $2,962.50 per ounce and was up 0.2% at $2,932.76 per ounce by 10:54 a.m. EDT (1454 GMT).

“What we’re seeing here in palladium is a market that’s in a deeper deficit than many had expected earlier in the year... That’s going to continue to fuel higher prices in the near term,” said TD Securities commodity strategist Daniel Ghali.

At this rate, palladium can trade north of $3,000 by next month, he added.

Prices of palladium, used in catalytic converters to clean car exhaust fumes, have risen about 20% so far this year.

A Reuters poll returned a higher forecast for palladium after flooding at the biggest supplier, Russia’s Nornickel, worsened a shortage.

Spot gold was flat at $1,780.33 per ounce. US gold futures were flat at $1,779.70.

“Gold is sort of treading water ahead of the Fed meeting,” StoneX analyst Rhona O’Connell said.

“The mantra of lower for longer in terms of US interest rates is pretty unshakeable. So that would essentially be supportive for gold. It wouldn’t necessarily be outright bullish because that’s what the markets are expecting.”

While no major policy changes are expected from the Fed’s meeting ending on Wednesday, investors will pay close attention to Chairman Jerome Powell’s economic outlook.

“In the short term, gold’s major headwind would be renewed increases in the longer-term yields, notable the 10-year rate on the back of fresh strength in US economic numbers,” analyst O’Connell added.

Analysts and traders have slashed their gold price forecasts, with many believing a return to last year’s record highs is unlikely as the economy recovers.

Silver rose 0.5% to $26.34 per ounce. Platinum advanced 0.6% to $1,251.26.