(Corrects company name and designation of analyst in 11th paragraph in Oct. 18 story)
* Inflows to gold funds show positive sentiment - analyst
* Dollar index near one-week high
* Silver and platinum slip to lowest in a week
By Sumita Layek and Arpan Varghese
BENGALURU, Oct 18 (Reuters) - Gold edged higher on Thursday, supported by an improved technical outlook that helped the metal hold out against a stronger dollar.
Spot gold XAU= rose 0.1 percent to $1,223.40 an ounce at 1322 GMT. U.S. gold futures GCcv1 were down 0.1 percent at $1,226.40.
"Overall, we have been technically breaking above the previous highs, so it will be difficult for gold prices to move below that," said ABN AMRO (AS:ABNd) analyst Georgette Boele.
Monday's global stock market sell-off has added appeal to gold, helping the metal to a two-and-a-half-month peak of $1,233.26.
Gold has also been testing resistance near the 100-day moving average, around $1,226, with some analysts saying a break above that level could trigger further gains and put pressure on short-sellers.
"The ones getting squeezed now are the shorts," Beole said.
The dollar index held near a one-week high after the U.S. Federal Reserve minutes from the last meeting reiterated a hawkish stance on monetary policy, normally a bearish signal for gold. MKTS/GLOB USD/
"Gold is taking bit of a pause partly because of the hawkish Fed minutes," ETF Securities analyst Nitesh Shah said, but he said many investors had been "re-engaging with the metal".
"We have seen strong inflows in exchange traded funds (ETF) in the last weeks that sort of indicate investor sentiment is turning now for the metal, moving to the positive side."
Holdings of the SPDR Gold Trust GLD , the largest gold-backed ETF, have gained more than 2 percent since Oct. 3.
"Geopolitical and macroeconomic factors are still not indicating exuberance and risk appetite returning to markets with full throttle," said Sugandha Sachdeva, vice president of metals, energy and currency research at Religare Broking Ltd.
Trade war concerns, a hawkish Fed and tensions between the United States and Saudi Arabia are seen weighing on appetite for riskier assets. This bodes well for gold as a hedge against market volatility and a portfolio diversifier, Sachdeva added.
In other metals, silver XAG= fell 0.4 percent to $14.55 an ounce, having earlier touched its lowest since Oct. 11 at $14.41.
Platinum XPT= was down 0.4 percent at $827.80 after hitting a one-week low of $822.50, while palladium XPD= gained 0.4 percent to $1,073.50.
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