Gold rises as funds buy at key chart support level

                                
 * Gold hits 1-1/2 month high on technical buying
                                
 * Silver, platinum group metals lower on weak commods
                                
 * Sentiment improves after SPDR Gold Trust holdings rise
                                
 * Coming up: U.S. weekly jobless claims data due Thursday
 (Recasts, updates prices, market activity; new byline, changes
dateline, previously LONDON)
                                
 By Frank Tang
                                
 NEW YORK, Aug 18 (Reuters) - Gold rose to a 1-1/2 month
high on Wednesday, extending a rally to a fifth day after a
break above a key technical level triggered a fresh round of
aggressive fund buying.
                                
 Silver and platinum group metals stayed lower on broad
weakness in commodities and a decline in crude oil.
                                
 Gold has risen this week on safe-haven buying along with
U.S. Treasuries prices. COMEX floor trader Jonathan Jossen said
gold futures' rise was "purely technical" as prices began to
rally after the metal found support at $1,223 an ounce, where a
series of successive highs were made back in mid-July.
                                
 Strong fund buying also suggested gold could have a sharp
move in the near term, Jossen said.
                                
 "There are a lot of big options trade, and the funds are
getting back in. The funds will put their bets on when they
think technically it is going to make a move," Jossen said.
                                
 Spot gold <XAU=> was at $1,230.90 per ounce by 12:50 p.m.
EDT (1650 GMT), up from $1,222.90 late in New York on Tuesday.
U.S. gold futures for December delivery <GCZ0> were up $5.20 to
$1,233.50 per ounce.
                                
 Gold moved higher as the dollar edged lower against a
basket of major currencies <.DXY>, resuming its usual inverse
correlation with the U.S. currency that had not broken down
over the past few sessions.
                                
 After trading in a broad range for two months, gold has
rallied this week on worries about a double-dip recession after
a flurry of weak economic data and the Federal Reserve's
downgrade of its economic outlook.
                                
 "Gold may be trading range-bound until the end of August
and then the fourth quarter should be interesting for gold. We
may see the old highs again," said Afshin Nabavi, head of
trading at MKS Finance.
                                
 "All through the month of July and the beginning of August
we saw remarkable physical related buying, so that has put a
very good support on the market for the time being," he added.
"If the market does dip again we will see fresh interest coming
out of the physical market."
                                
 U.S. stocks also rose as advancing consumer shares helped
push the S&P 500 into positive territory, while crude oil fell
to a five-week low as government data showed crude inventories
and oil products rose to a record high. [.N] [O/R]
                                
 GOLD ETF HOLDINGS RISE
                                
 Asia-based dealers said a positive outlook for gold was
underpinned by a rise in ETF holdings and nagging worries about
the health of the global economy.
                                
 The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P>, said its holdings rose to 1,294.604 tonnes
by Aug. 17 from 1,286.699 tonnes on Aug. 12. Holdings hit a
record at 1,320.436 tonnes on June 29. [GOL/SPDR]
                                
 Fears about a double-dip recession after a flurry of weak
economic data and the Fed's downward reassessment of its U.S.
outlook have lifted gold's appeal as an alternative investment.
Also, gold demand in top consumer India is picking up for the
busy festival season, starting with Raksha Bandhan on Aug. 24,
and extending till Dhanteras in November, the single biggest
gold-buying day.
                                
 A firmer rupee is also expected to offset gains in global
gold prices. [GOL/IN]
                                
 Silver <XAG=> was at $18.40 per ounce compared with $18.47
late on Tuesday in New York. Platinum <XPT=> was at $1,530.00
from $1,538.50, while palladium <XPD=> was at $486.30 from
$493.50.
Prices at 1:00 p.m. EDT (1700 GMT)                            
                                
                           LAST      NET    PCT     YTD
                                
                                     CHG    CHG     CHG
US gold         <GCZ0>     1233.70     5.40   0.4%   12.5%
US silver       <SIU0>      18.445   -0.150  -0.8%    9.5%
US platinum     <PLV0>     1537.20    -9.40  -0.6%    4.5%
US palladium    <PAU0>      490.50    -6.80  -1.4%   20.0%
Gold            <XAU=>     1231.40     8.35   0.7%   12.3%
Silver          <XAG=>       18.43    -0.04  -0.2%    9.4%
Platinum        <XPT=>     1530.00    -8.50  -0.6%    4.4%
Palladium       <XPD=>      488.50    -5.00  -1.0%   20.5%
Gold Fix        <XAUFIX=>  1218.00    -5.00  -0.4%   10.3%
Silver Fix      <XAGFIX=>    18.36   -18.00  -1.0%    8.1%
Platinum Fix    <XPTFIX=>  1537.00     6.00   0.4%    4.8%
Palladium Fix   <XPDFIX=>   490.00     4.00   0.8%   21.9%
 (Additional reporting by Veronica Brown and Rebekah Curtis in
London and Lewa Pardomuan in Singapore)