* Gold near 2-wk high on firm oil and soft dollar
* Thin volumes with U.S. market on holiday Monday
* U.S. data due later to shed more light on economy
(Updates prices, fresh comment, PVS SINGAPORE)
By Anna Stablum
LONDON, Aug 29 (Reuters) - Gold rose on the back of a soft
dollar and firmer oil prices on Friday, hovering near its
highest level in more than two weeks, with investors expecting
U.S. economic data to shed more light on the world economy.
"Gold is tracking oil higher ... but this afternoon will be
interesting as the United States is on holiday on Monday and
volumes will be thin so it could be a very volatile session,"
said Mitsubishi analyst Tom Kendall.
Gold <XAU=> firmed to $836.75/837.75 an ounce by 0954 GMT
from $831.45/832.65 late in New York on Thursday.
Gold jumped to $844.00 an ounce in the previous session, its
highest level since August 11.
The dollar slipped against a basket of currencies <.DXY> on
profit-taking and after oil <CLc1> rose to $116.71 a barrel on
worries about possible supply disruptions caused by Tropical
Storm Gustav. []
"As long as Gustav keeps heading towards the Gulf of Mexico
gold will be supported and might even rise above $840," said
Kendall.
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 well below a record high of $1,030.80 hit in March.
"Market sentiment could remain subdued as investors search
for further clues on the U.S. dollar," said Manqoba Madinane at
Standard Bank in a research note.
U.S. Chicago Purchasing Management Index is due at 1345 GMT
and the Reuters/Michigan sentiment data lands at 1355 GMT.
"Also, the public holiday in the U.S. on Monday might see
investors consolidate positions," Madinane said.
STRONG DEMAND FROM INDIA
With gold prices trading 20 percent below an all-time high,
physical demand was seen supporting the market.
"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 Jeffrey 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."
Spot platinum <XPT=> fell to $1,467.50/1,487.50 an ounce from
$1,469.00/1,489.00 late in New York on Thursday.
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=> rose to $297.00/305.00 an ounce from
$289.00/297.00 an ounce. Silver <XAG=> firmed to $13.81/13.86 an
ounce from $13.64/13.70.
(Additional reporting by Lewa Pardomuan, editing by Peter
Blackburn)
