March 18 (Reuters) - Palladium surged to a record high on Monday, boosted by ongoing supply shortages for the autocatalyst metal, while gold rose as expectations the U.S. Federal Reserve will pursue an accommodative monetary policy this year weighed on the dollar.
Spot palladium scaled an all-time peak of $1,577 an ounce and was up 0.8 percent at $1,571.65 at 1321 GMT.
“The industry does not use bars and so the mines make grains, which are not deliverable,” Gero said, adding thin trading was perking up volatility of the metal.
Palladium prices have jumped more than 24 percent so far this year due to a sharp supply deficit and increasing demand.
Higher lease rates of palladium show tightness in the market, Capital Economics analyst Ross Strachan said, adding that speculative interest was also driving up demand.
However, falling car sales in China, the United States and Europe due to slowing economic growth could push prices down to the $1,100 region by the end of the year, Strachan said.
Meanwhile, spot gold was up 0.3 percent at $1,304.88 per ounce. U.S. gold futures gained 0.2 percent to $1,304.70.
“With lack of any other news, the inspiration (for gold) is coming from a softer dollar,” Saxo Bank analyst Ole Hansen said.
The Fed will begin its monetary policy meeting on Tuesday, ending with a news conference on Wednesday.
The dollar index slid 0.2 percent, having posted its biggest weekly decline since early December last week.
Global stocks rose to their highest in five months as traders began to price in an accommodative stance from the U.S. central bank.
Data on Friday showed speculators reduced their net long positions in gold for a third straight week. .
On the technical front, $1,275 is likely to offer good support, while $1,310 and beyond that $1,355-60 are the resistance levels to watch, said Jigar Trivedi, commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.