* Palladium holds below record high of $2,925.14 hit on Friday
* U.S. factory activity powered ahead in early April
* Speculators raised bullish positions in COMEX gold - CFTC (Updates prices)
By Shreyansi Singh
April 26 (Reuters) - Gold gained on Monday, as surging COVID-19 cases boosted the metal's safe-haven appeal, aided by a weaker dollar ahead of the U.S. Federal Reserve's meeting this week, while auto-catalyst palladium held below a record peak scaled last week.
Spot gold XAU= was up 0.1% at $1,778.22 per ounce by 0707 GMT. U.S. gold futures GCv1 fell 0.1% to $1,775.70 per ounce.
"The COVID-19 situation in India and Japan is deteriorating. So that is boiling demand for safety, resulting in higher gold prices," said Margaret Yang, a strategist at DailyFX, adding that an easing dollar is further supporting prices. USD/
Cases in India registered a record surge, while Japan declared states of emergency for Tokyo, Osaka and two other prefectures on Friday to combat a spike. raised their bullish positions in COMEX gold in the week to April 20, the U.S. Commodity Futures Trading Commission said on Friday. CFTC/
"On the other hand, investors are looking at very strong U.S. economic data released on Friday," said Yang, adding higher yields are capping gold's gains. US/
U.S. factory activity powered ahead in early April, while retail sales jumped to a record high in March and hiring accelerated. participants now await Fed's two-day policy meeting starting on Tuesday. Although no change in policy is expected, the focus will be on Chair Jerome Powell's press conference. XPD= rose 1.2% to $2,889.47 per ounce, after scaling a record peak of $2,925.14 on Friday.
"Strong industrial demand from the auto sector and investor interest saw palladium trade to a fresh record high... underpinned by Nornickel's lacklustre output numbers and continued strong demand from tightening emissions standards," said independent analyst Robin Bhar in a note.
"Palladium has been in deficit for several years and this is set to continue over coming years."
Silver XAG= fell 0.2% to $25.95 per ounce. Platinum XPT= was up 0.6% at $1,237.01.