* Gold firms near 2-week highs
* Oil up more than $1 on supply worries
* Strong physical demand from India
(Updates prices to afternoon)
By Lewa Pardomuan
SINGAPORE, Aug 29 (Reuters) - Gold gained to track strength
in oil prices on Friday, hovering near its highest level in
more than two weeks hit the previous day, but a firmer U.S.
dollar may limit gains. Platinum dropped after rising more than
2 percent in New York in a rally driven by high gold prices
rather than demand for autocalysts, which account for more than
50 percent of global demand for the metal.
"If anything, gold promises to remain volatile. In the near
term, gold-price movements will continue to reflect the ups and
downsin the U.S. dollar/euro exchange rate," said Jeffrey
Nichols, managing director of American Precious Metals
Advisors. Gold <XAU=> hit an intraday high of $836.55 an
ounce, up from $831.45/832.65 an ounce late in New York. Gold
jumped to $844.00 an ounce on Thursday, its highest level since
Aug. 11, before losing some of the gains to a firming dollar.
"We'll probably trade in a range of $830 to $840. Despite
some positive news such as rising oil prices, it may be
difficult to crack the $845 and $850 resistant levels because
there are not many participants in the market," said a dealer
in Hong Kong.
Dealers said volumes were slow ahead of Monday's Labor Day
holiday in the United States.
The dollar held firm against a basket of currencies after
data showed the U.S. economy grew at a faster pace than
initially thought during the second quarter. []
Oil <CLc1> gained more than $1 to near $117 a barrel as
energy companies prepared for Tropical Storm Gustav. []
Gold has bounced as much as 9 percent since tumbling to
nine-month lows around $773 two weeks ago, on high oil prices
and demand from jewellers in Asia and other parts of the world.
But gold is trading below a record high of $1,030.80 hit in
March.
STRONG DEMAND FROM INDIA
"I've noticed that Indian housewives are far better
forecasters of the gold price than most of us paid to do the
job -- and,today, Indian housewives are buying the yellow
metal," said Nichols of American Precious Metals Advisors.
"Fortuitously, physical demand has picked up sharply in the
past month, particularly among retail investors. We've seen
this in India where jewellery demand has picked up early in
response to low prices ahead of the coming festival season."
Demand for gold is picking up in India, the world's largest
consumer, ahead of the festive season which will peak in
October with Diwali, the Hindu festival of lights.
The new benchmark contract on the Tokyo Commodity Exchange,
August 2009 <JAUc6>, rose 13 yen per gram higher at 2,950 yen
per gram. New York gold futures <GCZ8> added $3.7 an ounce to
$840.90.
Spot platinum <XPT=> fell to $1,460.00/1,480.00 an ounce
from $1,469.00/1,489.00 late in New York.
Platinum, which plummeted to 11-month lows around $1,296
last week, has suffered from expectations car demand will slow
as the global economy falters, cutting demand for
autocatalysts.
Spot palladium <XPD=> inched up to $292.00/300.00 an ounce
from $289.00/297.00 an ounce. Silver <XAG=> edged up to
$13.62/13.68 an ounce from $13.64/13.70 an ounce.
Precious metals prices at 0359 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 835.50 2.25 +0.27 0.34
Spot Silver 13.63 0.00 +0.00 -7.72
Spot Platinum 1460.00 -6.50 -0.44 -3.95
Spot Palladium 292.00 3.00 +1.04 -20.65
TOCOM Gold 2949.00 12.00 +0.41 -3.63
12910
TOCOM Platinum 5090.00 74.00 +1.48 -4.66
10785
TOCOM Silver 483.60 -2.60 -0.53 -10.61
541
TOCOM Palladium 1053.00 14.00 +1.35 -22.06
303
Euro/Dollar 1.4741
Dollar/Yen 109.09
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Urquhart)
