UPDATE 1-Gold firms near 2-week highs on oil

                                
   * Gold firms near 2-week highs at $835.95/836.95 an ounce
                                
 * Oil up more than $1 on supply worries
                                
 * Strong physical demand from India
  (Updates prices, adds quotes)
                                
 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 also 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 lustrous 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=> rose to  from 831.45/832.65 an ounce
late in New York. Gold jumped to $844.00 an ounce on Thursday,
its highest level since August 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 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. [USD/]
                                
  Oil <CLc1> gained more than $1 to $116.60 as energy
companies prepared for Tropical Storm Gustav. [O/R]
                                
 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 the 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>, ended the morning session 11 yen per gram
higher at 2,948 yen per gram.
                                
 New York gold futures <GCZ8> added $4.4 an ounce to
$841.60.
                                
 Spot platinum <XPT=> fell to $1,455.00/1,475.00 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 the metal as
components in autocatalysts.
                                
 Spot palladium <XPD=> inched up to $290.50/298.50 an ounce
from $289.00/297.00 an ounce. Silver <XAG=> edged up to
$13.64/13.71 an ounce from $13.64/13.70 an ounce late in New
York.
  Precious metals prices at 0218 GMT
 Metal             Last    Change  Pct chg  YTD pct chg
Turnover
 Spot Gold         835.70    2.45   +0.29      0.36
 Spot Silver        13.64    0.01   +0.07     -7.65
 Spot Platinum    1455.00  -11.50   -0.78     -4.28
 Spot Palladium    290.50    1.50   +0.52    -21.06
 TOCOM Gold       2948.00   11.00   +0.37     -3.66       
11348
 TOCOM Platinum   5078.00   62.00   +1.24     -4.89        
9577
 TOCOM Silver      482.80   -3.40   -0.70    -10.76         
414
 TOCOM Palladium  1050.00   11.00   +1.06    -22.28         
252
 Euro/Dollar       1.4744
 Dollar/Yen        109.06
 TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
 (Editing by Anshuman Daga)