Palladium pierced the $3,000 an ounce high for the first time on Friday, powered by persistent concerns about short supply of the metal used primarily for emissions-controlling devices in automobiles.
Palladium was last up 1% to $2,984.68 per ounce, after hitting an all-time high of $3,007.73. It was on track to post a monthly gain as well.
"Palladium is in a structural deficit since 10 years. We have seen above ground inventories falling to very low levels, and now the price gives a signal to investors still holding it," UBS analyst Giovanni Staunovo said.
"The commodity ... comes with very low trading volume so it can be very illiquid and this is making the moves even more crazy. This rally can continue, particularly if car sales start to improve going forward."
Demand from the auto industry is rising and expected to climb further as a semiconductor chip shortage that has curtailed vehicle production eases later this year.
But Commerzbank analyst Carsten Fritsch said prices are unlikely to see a sustained run above $3,000, with substitution likely to bring prices down as the year goes on.
"At this level more and more car manufacturers will think about substitution (of palladium for platinum)."
A shift to electric vehicles may also eventually erode palladium demand, although tightening environmental rules have forced carmakers to use more and more palladium in their gasoline engines in recent years.
Meanwhile, spot gold was down 0.2% at $1,769 per ounce by 0910 GMT. U.S. gold futures were steady at $1,769.00.
Data showed on Thursday that U.S. economic growth accelerated in the first quarter.
Separately, a report from the U.S. Labor Department showed a dip in initial claims for state unemployment benefits.
Silver fell 0.5% to $25.96 per ounce, though was poised for an over 6% monthly gain - its biggest since last December. Platinum was up 0.7% at $1,206.
(Reporting by Nallur Sethuraman in Bengaluru, additional reporting by Peter Hobson in London; Editing by Emelia Sithole-Matarise)