BENGALURU, Jan 17 (Reuters) - Palladium prices hit record levels on Thursday amid falling supply and growing demand, while gold stood firm on expectations the U.S. Federal Reserve will hold off on further interest rate hikes.
FUNDAMENTALS
* Spot palladium XPD= was up 0.1 percent at $1,360 at 0051 GMT, after earlier hitting a record-high of $1,366.50.
* The price of palladium, used mainly in emissions-reducing catalysts for vehicles, is up over 60 percent since marking a trough in mid-August. Prices for the metal overtook gold for the first time in 16 years early in December 2018. Spot gold XAU= was steady at $1,293.36 per ounce, while U.S. gold futures GCv1 were firm at $1,293 per ounce.
* Risks to the U.S. economic recovery, no end in sight to a partial government shutdown and volatile stock markets have made several Federal Reserve officials call for patience before raising interest rates again. Businesses across the United States have become less optimistic in recent months, the Fed said on Wednesday in its latest report on the economy. Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion.
* Meanwhile, British Prime Minister Theresa May's government won a vote of no confidence on Wednesday, with 325 votes versus 306, meaning that May will now press ahead to find a consensus over how to proceed with Britain's departure from the European Union, after her proposed deal was rejected by parliament. Asian shares crept higher on Thursday as upbeat bank earnings bolstered Wall Street, while an anti-climactic end to the latest chapter in the Brexit saga gave sterling a moment's peace. MKTS/GLOB
* Federal prosecutors are investigating Huawei Technologies, the world's largest telecommunications equipment maker, for allegedly stealing trade secrets from U.S. businesses and could soon issue an indictment, the Wall Street Journal reported on Wednesday. China's central bank injected a record $83 billion into the country's financial system on Wednesday, seeking to avoid a cash crunch that would put further pressure on the weakening economy. Kazakhstan raised its gold holdings by 5 tonnes to 350.46 tonnes in December, according to the International Monetary Fund.