By Eileen Soreng
BENGALURU (Reuters) - 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.
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"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.
(Reporting by Eileen Soreng and Arpan Varghese in Bengaluru; Additional reporting by Nallur Sethuraman; Editing by Dale Hudson)