* Gold has traded in $16 range in last week
* Platinum off over 2-week highs hit on Wednesday
* SPDR Gold holdings drop 1.49 pct (Updates throughout, adds LONDON dateline)
By Zandi Shabalala
LONDON, Oct 27 (Reuters) - Gold rose marginally on Thursday, on track to end the week barely changed as the market waited for more signs about the timing of an expected U.S. interest rate rise from the Federal Reserve.
Higher interest rates lift the opportunity cost of holding non-yielding assets and boost the dollar, in which gold is priced.
Spot gold XAU= was up 0.2 percent at $1,268.96 an ounce by 0920 GMT while U.S. gold futures GCcv1 rose by a similar margin to $1,269.50 per ounce. It has traded in a roughly $16 range over the last week.
"Trading is really tight. We are in a wait-and-see mode until the next Fed meeting or U.S. elections. We are probably going to trade like this until something substantial happens," Capital Economics commodities economist Simona Gambarini said.
Gold is also often seen as an alternative investment during times of political and financial uncertainty such as the U.S. Presidential elections in November.
Higher physical demand from India is helping prices stay afloat and preventing a selloff ahead of an expected interest rate rise in December, analysts say.
Festivals in India, such as Diwali and Dhanteras when gold is traditionally given as gifts, are approaching, which will also keep demand buoyant.
"Physical demand from Asia continues to underpin the market at present, with gold continuing to consolidate for the time being between $1,250-75," MKS PAMP Group trader Sam Laughlin said.
SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 1.49 percent to 942.59 tonnes on Wednesday. market will look to third-quarter UK GDP data and data from the US later in the day for the latest economic signals.
Silver XAG= was up 0.6 percent at $17.69 an ounce, while platinum XPT= gained 0.3 percent to $964.80. Platinum rose to an over two-week high of $970.80 on Wednesday.
Palladium XPD= was flat at $621.10 per ounce.