SINGAPORE -- 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 US dollar may limit gains.

Platinum dropped after rising more than 2.0 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 downs in the US dollar/euro exchange rate," said Jeffrey Nichols, managing director of American Precious Metals Advisors.

Gold 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 US economy grew at a faster pace than initially thought during the second quarter.

Oil gained more than $1 to near $117 a barrel as energy companies prepared for Tropical Storm Gustav.

Gold has bounced as much as 9.0 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 rose 13 yen per gram higher at 2,950 yen per gram. New York gold futures added $3.7 an ounce to $840.90.

Spot platinum 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 inched up to $292.00/300.00 an ounce from $289.00/297.00 an ounce. Silver edged up to $13.62/13.68 an ounce from $13.64/13.70 an ounce.