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PRECIOUS-Palladium extends record run, gold steadies ahead of Fed

    * Dollar index steadies near multi-week low
    * Two-day Fed meeting to begin on Tuesday

 (Updates prices)
    By Eileen Soreng
    April 26 (Reuters) - Deficit-stricken palladium scaled a
record peak on Monday, while gold held steady as investors
awaited policy cues from the Federal Reserve's meeting this
week.
    Palladium        was up 1.7% to $2,903.77 per ounce by 1:43
p.m. EDT (1743 GMT) after hitting an all-time high of $2,941.
    The metal, used in emissions-reducing catalysts in
automobiles, has risen about 19% so far this year.
    Palladium could remain heavily undersupplied in 2021 even
with Russia's Nornickel           having scaled back production
losses, said Standard Chartered analyst Suki Cooper. She
forecast average prices of $2,800 per ounce in the second
quarter, saying it was likely to be the "tightest period."
            
    "While the speed of vaccine rollout is a key differentiator
of near-term growth prospects, the recovery of auto sales across
key regions such as the U.S. and China bodes well for palladium
demand, but is set to keep the market balance tight," Cooper
added.
    Spot gold        rose 0.1% to $1,779.20 per ounce and U.S.
gold futures        settled 0.1% higher at $1,780.10.
    "The (gold) market just wants to get past FOMC to see what
they have to say about inflation," said Bob Haberkorn, senior
market strategist at RJO Futures. 
    Traders would also focus on the Fed's long-term outlook on
interest rates and "their plan of action on short-term rates,"
Haberkorn added. 
    The Fed meeting will begin on Tuesday, with investors'
attention focused particularly on what Fed Chair Jerome Powell
will say in his post-meeting news conference on Wednesday.
            
    The dollar        and U.S. Treasury yields were steady.
Bullion has dropped more than 6% so far this year, mostly
pressured by rising yields. 
    "A break above the $1,800 level, however, may probably
require the 10Y yield to trade below 1.55%," analysts at OCBC
said in a note. 
    Silver        gained 0.7% to $26.17 per ounce, while
platinum        advanced 0.8% to $1,239.27.

 (Reporting by Eileen Soreng and Arpan Varghese in Bengaluru;
Editing by Paul Simao, Richard Chang and Peter Graff)
  
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