Palladium extended gains to a more than seven-month high on Thursday, spurred by concerns over supply shortages following harsh sanctions on top-producer Russia, while the Ukraine crisis and soaring inflation lifted demand for safe-haven gold.

Palladium, used by automakers in catalytic converters to curb emissions, rose 3% to $2,748.86 by 10:17 a.m. EST (1517 GMT), after hitting its highest since mid-June 2021 earlier in the session.

"Palladium is the one commodity from Russia which accounts for a sizable amount of exposure to the country. So it is in the sweet spot in terms of its impact," ED&F Man Capital Markets analyst Edward Meir said.

Western nations have piled sanctions on Russia for its invasion of Ukraine, which accounts for 40% of global palladium production.

"These sanctions have been designed to enable continued trade of commodities the West relies on, so any impact we're seeing is unintentional to an extent and will contribute to higher prices, at least for now," said Craig Erlam, senior market analyst at OANDA.

Spot gold was up 0.2% at $1,929.29 per ounce. U.S. gold futures rose 0.6% to $1,932.70.

The Federal Reserve is expected to start raising rates with only a quarter point move, which means the central bank is even further behind the curve on in its inflation fight and that should be good for gold, Meir said.

Investors are looking out for more clues on U.S. interest rate hikes as Fed Chair Jerome Powell's Congress testimony enters its second day.

Powell on Wednesday said he will back a quarter point rate increase when the Fed meets March 15-16.

Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week.

Spot silver eased 0.4% to $25.15 per ounce, while platinum rose 1% to $1,081.67.