* Palladium hits a record high of $1,594/oz
* Gold edges up for a third consecutive session
* SPDR gold holdings post biggest daily gain since Jan. 18
By K. Sathya Narayanan and Swati Verma
March 19 (Reuters) - Palladium surged to a record on Tuesday as
the risk of a ban on some Russian exports added to supply concerns for
the autocatalyst metal, while gold rose on expectations the U.S.
Federal Reserve will stay dovish at its meeting this week.
Spot palladium was up 0.2 percent at $1,586.92 an ounce as of
0814 GMT, and was within striking distance of the $1,600 level after
registering an all-time high of $1,594 earlier in the session.
"The market is in uncharted territory and on the fundamental
side the ban from Russia has supported the prices," said Ajay
Kedia, director at Kedia Commodities in Mumbai.
"Though there are concerns that auto sales are falling, the
supply deficit problem is offsetting it," he said, adding the
market is highly overbought.
The price of the metal has nearly doubled since mid-August and is
up about 26 percent so far the year.
Russia, a major producer of palladium, is mulling a ban on the
export of precious metals scrap and tailings to promote domestic
refining of the materials.
On the demand side, expectations for more economic stimulus by
China, the world's biggest auto market, could be a short-term driver
for the already tight market, said Ilya Spivak, a senior currency
strategist at DailyFX.
Meanwhile, spot gold gained 0.1 percent to $1,304.86 per ounce,
as the dollar languished near two-week lows hit in the previous
session on growing expectations the Fed would shift to a more
accommodative policy stance.
U.S. gold futures rose about 0.2 percent to $1,304.60.
"Gold has been edging up and the main driver is a softening
dollar," said Margaret Yang, a market analyst with CMC Markets,
Singapore. The Fed decision and Brexit vote could be gold boosters in
the short term, she added.
The U.S. central bank will start its two-day meeting on interest
rates later in the day.
If the Fed is more dovish than expected, the dollar is likely to
move lower and in turn support gold prices, while uncertainty
surrounding Brexit has increased demand for safety, Yang said.
Prime Minister Theresa May's Brexit plans were thrown into further
turmoil on Monday when the speaker of parliament ruled that she could
not put her divorce deal to a new vote unless it was re-submitted in a
fundamentally different form.
Gold is often used as a hedge against political and financial uncertainties.
Indicative of investor sentiment, holdings of the SPDR Gold Trust
, the world's largest gold-backed exchange-traded fund, rose about 1.1
percent on Monday, its biggest one-day percentage gain since Jan. 18.
In other precious metals, silver slipped 0.6 percent to $15.35
per ounce, while platinum gained 0.8 percent to $836.81 per ounce.
Palladium prices scale all-time high on investor buying, supply
(Reporting by K. Sathya Narayanan and Swati Verma in Bengaluru;
Editing by Richard Pullin and Shreejay Sinha)
((Swati.Verma@thomsonreuters.com; within U.S. +1 651 848 5832,
outside U.S. +91 80 6749 6356/1298 ; Reuters Messaging: email@example.com))