* Fed announcement due at 1800 GMT
* Platinum hits over two-week high
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
By Arijit Bose
March 20 (Reuters) - Palladium rose to an all-time high on Tuesday as the supply outlook tightened further, while gold steadied ahead of an interest rate decision in the United States.
Spot palladium XPD= hit a record of $1,608 an ounce earlier before easing back to trade 0.2 percent lower at $1,592.91 at 1228 GMT.
"The story remains the same (for palladium) as long as there is tight supply," said Saxo Bank analyst Ole Hansen.
"There are also stories of Russians potentially cutting supply (of precious metal scraps and tailings) that is adding to a very bullish scenario."
The trade and industry ministry of Russia, a major producer of the autocatalyst metal, is contemplating a temporary ban on the export of precious metals' scrap and tailings from May 1 to Oct. 31 this year. on the technical front, the rally in palladium, which is now in the overbought territory, could fizzle out, said ActivTrades chief analyst Carlo Alberto De Casa.
Both palladium and platinum are used as emissions reducing catalysts in automobiles but palladium is used more in gasoline engines.
But expectations of alternatives to palladium have not materialized, Saxo Bank's Hansen said, adding that "even if there is a substitution, that could take months to be implemented."
Elsewhere, spot gold XAU= remained unchanged at $1,306.55 an ounce, while U.S. gold futures GCcv1 were steady at $1,306.40 an ounce.
Investors are now keenly eyeing the U.S. Federal Reserve's decision on interest rates at 1800 GMT, followed by a news conference by Chairman Jerome Powell.
The Fed is widely expected to stay put on interest rates, shave the number of hikes projected for the rest of the year, and release long-awaited details of a plan to end the monthly reduction of its massive balance sheet. surprises are expected from the Fed-front, said Julius Baer analyst Carsten Menke, with impacts on gold expected to remain muted.
"We see gold trending sideways for the first half of this year and then we see a renewed strength towards the end of the year when we expect the U.S. dollar to weaken," he added.
Lower interest rates reduce the opportunity cost of holding non-yielding gold and weigh on the dollar.
Among other precious metals, silver XAG= shed 0.1 percent to $15.34 an ounce, while platinum XPT= gained 0.9 percent to $853.63 an ounce, having hit its highest since March 4 at $861.33 earlier in the session.
Rapid inflows into physically backed platinum exchange-traded funds (ETFs) and a sharp drop in speculative bets on lower prices suggest the metal is on the cusp of a recovery.