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LONDON, Sep 22 (Reuters) Gold jumped 1.8 percent to a one-week high on Friday, helped by a decline in the U.S. dollar against major currencies and a rebound in crude oil prices.

Silver tracked gold and rose to a one-week high, while other precious metals also advanced. Dealers noted a drop in physical buying in parts of Asia after hectic buying in the past days at lower price levels.

Spot gold was quoted at $592.50/593.50 an ounce by 1004 GMT, up from $582.30/583.30 late in New York on Thursday, when it rose more than $2.

''The (U.S.) Federal Reserve is keeping interest rates steady and a lot of economic data coming out of the U.S. doesn't look very nice,'' said Michael Widmer, director of metals at Calyon Corporate and Investment Bank in London.

''It's difficult for the dollar to appreciate strongly and the downward pressure still persists. Also, there are more technical indicators that would actually suggest gold prices rising going forward rather than coming off,'' he said.

The dollar fell to a two-week low against an index of currencies after a regional Federal Reserve survey showed further signs of a slowdown in the U.S. economy, reinforcing expectations U.S. interest rates will stay on hold.

The Philadelphia Fed's business activity survey for September showed its first negative reading in over three years, indicating a significant decline in manufacturing in the mid-Atlantic region.

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. Some investors also turn to commodities from currencies for better returns.

Some dealers said gold was at the mercy of crude oil and movements of the U.S. dollar, and there was a possibility of a drop to $550 if the metal failed to hold above $580.

Oil rose for a second day after a brief mid-week dip below $60 a barrel, as investors bet a six-week slump driven by rising inventories and easing Iran tensions could be coming to an end.

PHYSICAL BUYING DIPS The physical sector saw a drop in buying in parts of Asia but buyers in India, the world's top gold consumer, were splurging on the metal ahead of the festival buying season as a sharp fall in prices and a promising monsoon had ignited demand.

''While the scale of physical support that has emerged over the past two weeks is encouraging, I still think gold is vulnerable to further bouts of fund and institutional selling,'' The BullionDesk.com said in a daily note.

Dealers were keeping a close watch on gold selling by central banks.

Europe's central banks have so far sold 380 tonnes against the full quota of 500 tonnes in the second year of an agreement that regulates bullion sales. The year ends on Sept. 26.

In other precious metals, silver rose to $11.30/11.37 an ounce from $11.05/11.12 in New York, while platinum was up at $1,149/1,154 an ounce from $1,135/1,140. Palladium jumped to $315/320 an ounce from $305/310.

REUTERS PKS HT1827