PRECIOUS-Gold bounces from 6-week lows, marks second weekly loss
* Gold marks 3 pct weekly decline
* Dollar up 0.1 pct, global equities rise
* U.S. consumer spending up 0.3 pct in Feb (Updates prices; adds comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, March 28 (Reuters) - Gold turned higher after touching six-week lows under $1,300 an ounce on Friday, but marked its second straight weekly decline as an improving U.S. economic outlook lifted the dollar and bolstered appetite for risk.
Bullion has been volatile and has dropped about $100 an ounce from a six-month high in the last nine trading sessions on declining geopolitical tensions, strong U.S. economic data and comments by Federal Reserve Chair Janet Yellen that interest rates could rise in the first half of 2015.
Low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, had been an important factor driving bullion higher in recent years.
Spot gold fell to its lowest since Feb. 12 at $1,285.34 an ounce in earlier dealing before rebounding to trade up 0.3 percent at $1,294.16 by 2:40 p.m. EDT (1840 GMT). Bullion made a 3-percent weekly fall.
"Economic figures on consumer sentiment keep rates low, stocks up, but gold is seeing (a) short-covering rally today," said George Gero, vice-president at RBC Capital markets.
U.S. COMEX gold futures for April delivery settled down 90 cents, or 0.07 percent, at $1,293.80 an ounce.
"Market participants over the past days have started to look back at economic fundamentals and focus less on Russia, Crimea," Credit Suisse analyst Karim Cherif said.
"You will probably see prices continue to slowly slide downward and unless you see renewed concern about the economic side or Russia, which doesn't seem to be the case, prices should fall."
The dollar rose 0.1 percent against a basket of currencies, while European and U.S. shares also moved higher.
The U.S. currency was aided by data showing U.S. consumer spending rose in February, in the latest sign that the economy was regaining strength after a setback caused by bad weather.
"If we don't close below $1,290 today, we could see some consolidation around these levels ahead of the ECB on Thursday and the U.S. nonfarm payrolls on Friday," VTB Capital analyst Andrey Kryuchenkov said, earlier in the session.
The next focus for the market will be the March nonfarm employment report due next Friday, which will give clues on the strength of the economy.
As a gauge of investor interest, holdings of the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, remained unchanged from Thursday after two straight days of outflows.
In the physical markets, traders said demand could pick up, given the recent sharp fall in prices but they remained cautious as consumers seemed uncertain about the price direction from current levels.
Prices in the world's biggest consumer, China, remained at a discount to spot prices, indicating lack of fresh demand.
Platinum was up 0.86 percent at $1,403.75 an ounce, while palladium gained 2.5 percent to $771.75 an ounce as a miners' strike in South Africa continued for the tenth week.
"Platinum prices look rather cheap here considering the severity of the situation in South Africa," UBS said in a note.
"We expect deliveries to start struggling in April - current prices suggest that the market is not fully pricing in this risk, therefore any indication of producer difficulties in meeting their contractual agreements with customers in the coming weeks is likely to have a considerable price impact."
Silver gained 0.5 percent to $19.77 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by William Hardy, Dale Hudson and Marguerita Choy)
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