* Oil up more than $2 a barrel as traders eye stocks data
* Dollar weaker against euro on fears over U.S. rescue plan
* SPDR Gold Trust bullion holdings jump 2 pct to record
(Recasts, updates prices, adds comment)
By Jan Harvey
LONDON, Sept 24 (Reuters) - Gold edged up on Wednesday as
uncertainty over the future of the planned $700 billion U.S.
bail-out plan for the financial sector boosted safe-haven
buying, with a weak dollar and a firmer oil supporting prices.
But gains were capped by a cautious uptick in optimism, as
Warren Buffett's $5 billion investment in Goldman Sachs <GS.N>
was seen as a vote of confidence in the banking sector. This has
tempered some interest in gold as a safe haven, traders said.
Spot gold <XAU=> rose to $899.00/901.00 an ounce at 1329
GMT, against $890.70 at the nominal New York close on Tuesday.
"The bailout package of Treasury Secretary Hank Paulson did
not get a well-received hearing yesterday in the U.S. Senate,"
said Dresdner Kleinwort consultant Peter Fertig.
"Furthermore, oil is rebounding again, and that is also a
supportive factor for gold," he added.
Paulson and Federal Reserve chairman Ben Bernanke are due to
testify on their bailout plan, which would see officials use
$700 billion of public money to buy up toxic banking assets,
before the House Financial Services Committee at 1830 GMT.
Uncertainty over whether the plan will be implemented, and
the implications if it is, are supporting gold.
However, traders say Buffett's announcement he is to invest
in Goldman Sachs cheered the market, keeping a lid on gains.
"The situation (in the financial markets) is calming down a
little bit," Deutsche Bank metals trader Michael Blumenroth
said. "This time last week people were very nervous."
"The Goldman news shows people are trusting banks again, and
are willing to invest in banks again," he added.
The softer dollar is supporting gold, which often is bought
as an alternative investment to the U.S. currency. Nagging
worries over the health of the U.S. financial sector are
pressuring the dollar. []
The other main external driver of gold, crude oil, is also
trending higher, adding more than $2 a barrel as forecasts for a
drop in U.S. crude stocks more than outweighed worries over the
government's financial rescue plan.
Traders are keenly awaiting the U.S. crude inventory report,
due out at 1435 GMT, for signs as to the next move in oil
prices.
ETF HOLDINGS HIT RECORD
Investment demand for gold meanwhile remained firm. The SPDR
Gold Trust, the world's largest gold-backed exchange traded
fund, said its holdings rose to a record for the second day
running on September 23, and now stand at 724.94 tonnes.
The trust's holdings have risen by more than 100 tonnes
since Lehman Brothers announced it was seeking bankruptcy
protection on September 15. []
Silver ETFs have also reported strong inflows. The world's
largest silver-backed ETF, iShares Silver Trust <SLV.A>, said
its holdings currently stand at a record 6,728 tonnes, up 295
tonnes or nearly 5 percent since September 15.
Spot silver <XAG=> was at $13.52/13.60 against $13.21 at the
nominal New York close on Tuesday.
Among other precious metals, platinum and palladium edged
higher. The two metals, which are primarily industrial in use,
have not benefited from the same investment flows as gold and
silver as a result of the financial crisis.
Spot platinum <XPT=> was at $1,223/1,243 an ounce, up from
$1,213 at the nominal New York close on Tuesday, while palladium
<XPD=> was at $246/254 an ounce against $245.
(Reporting by Jan Harvey; Editing by Michael Roddy
