Spot palladium rose as high as US$1,366.50 per ounce before slipping back to trade steady US$1,360.50 as of 0758 GMT, and has risen nearly 8% so far this month.
Spot gold was steady at US$1,292.51 per ounce, while US gold futures dipped 0.1% to US$1,292.40 per ounce.
“Congressional pushback on efforts to ease US sanctions against Russian metals producers, the world’s top source for palladium, have probably helped drive supply shortage worries,” said Ilya Spivak, senior currency strategist with DailyFx.
The price of palladium, used mainly in emissions-reducing catalysts for vehicles, has leapt more than 60% since a trough in mid-August. Prices for the metal overtook gold for the first time in 16 years late last year.
Many members of Congress have been questioning the US Treasury Department’s decision in December to ease sanctions imposed in April on certain Russian companies.
A firmer US dollar meanwhile kept a cap on gold.
“The dollar is quite strong and acting as a resistance for a breakout in gold,” Argonaut Securities analyst Helen Lau said.
Gold has gained for five straight weeks, but prices have been hovering around a $20 range for the past two weeks and have been unable to break through a strong technical resistance at US$1,300.
“Gold’s recent standstill seems to reflect the clouded US growth outlook, and uncertainty about the path forward for Fed monetary policy,” said Spivak of DailyFx.
Risks to the US recovery, including a self-imposed government shutdown and volatile stock markets have made several Federal Reserve officials call for patience before raising interest rates again.
The White House estimated the government shutdown is costing the American economy 0.13 percentage point in growth every week.
“Markets seemed to assume the Fed’s rhetoric shift away from hawkish pre-commitment as inherently dovish, but strong data flow recently suggest it may yet find scope for hikes this year,” Spivak said, adding that the duration of the shutdown will be important, making gold prices highly data-sensitive.
Worries over a disorderly Brexit, after UK Prime Minister Theresa May’s deal was defeated by British lawmakers on Tuesday, also supported gold prices, analysts said.
May on Wednesday narrowly won a confidence vote overnight and invited other party leaders for talks to try to break the impasse on a deal.
Spot gold is about to exit a neutral range of US$1,285-US$1,299, and either rise to US$1,311 or drop towards US$1,268, according to Reuters technical analyst Wang Tao.
Platinum fell 0.9% to US$797.50 an ounce, while silver dropped 0.3% to US$15.55.