PRECIOUS-Gold steady ahead of Fed meeting, palladium scales record peak

* Palladium hits new record high of $2,960.50/oz
* Palladium deficit to widen sharply in 2021: HSBC

(Updates prices)
By Sethuraman N R
April 27 (Reuters) - Gold prices were little changed on
Tuesday ahead of the U.S. Federal Reserve's meeting, while
palladium prices hit a new record high on persistent supply
worries.
Spot gold XAU= edged up 0.2% to $1,784.16 per ounce by
1313 GMT. U.S. gold futures GCv1 rose 0.2% at $1,784.10.
"Gold is sort of treading water ahead of the Fed meeting,"
StoneX analyst Rhona O'Connell said.
"The mantra of lower for longer in terms of U.S. interest
rates is pretty unshakeable. So that would be essentially be
supportive for gold. It wouldn't necessarily be outright bullish
because that's what the markets expecting."
While no major policy changes are expected from the Fed's
two-day policy meeting ending on Wednesday, investors will pay
close attention to Chairman Jerome Powell's outlook on the
economy.
The Fed slashed its benchmark overnight interest rate to
near zero last March after the pandemic hit the United States,
and has promised to leave borrowing costs unchanged until the
economy reaches full employment and inflation hits 2%.
Markets will also be watching the release of U.S. quarterly
gross domestic product data this week.
"In the short term, gold's major headwind would be renewed
increases in the longer-term yields, notable the 10-year rate on
the back of fresh strength in U.S. economic numbers," analyst
O'Connell added.
The dollar .DXY edged up, making gold less alluring for
other currency holders.
Meanwhile, palladium XPD= was steady at $2,922.69 per
ounce, after hitting a record high of $2,960.50.
"We expect supply, demand deficits to widen sharply in 2021
to levels not seen since 2014, and narrow in 2022 but remain
wide. This should raise pressure on limited above-ground stocks
and aid prices," HSBC analysts said in a note. Silver XAG= rose 0.6% to $26.37 per ounce. Platinum XPT=
inched up 0.1% to $1,245.00.