PRECIOUS-Gold moves off two-week low as dollar slips, shares retreat

* Analysts say $1,300 unlikely to be tested in short term
    * Goldman sees limited gold upside, few Fed surprises

 (Updates prices; adds comment, second byline, NEW YORK
    By Marcy Nicholson and Clara Denina 
    NEW YORK/LONDON, May 11 (Reuters) - Gold rebounded from
two-week lows on Wednesday as the dollar's rally paused and
global shares fell, rekindling investors' appetite for the
precious metal.
    Spot gold rose 0.8 percent to $1,275.50 an ounce by
2:03 p.m. EDT (1803 GMT), while U.S. gold for June delivery
 settled up 0.8 percent at $1,275.50 an ounce. The metal
touched a low of $1,257.25 on Tuesday, its weakest since April
    "Today's move is mostly about the dollar and equities and
the bigger picture that it's highly unlikely that the Fed's
going to raise rates at the next meeting," said Bob Haberkorn,
senior market strategist for RJO Futures in Chicago.
    The dollar slipped 0.5 percent against a basket of major
currencies, set to snap a six-session rally. The weak
greenback makes dollar-priced assets such as gold cheaper for
holders of other currencies.
    U.S. and European stocks stumbled amid disappointing
corporate earnings after big gains a day earlier. 
    Gold reached a 15-month high of $1,303.60 last week, before
surrendering to the broad strength of the dollar. 
    "Gold has held technical support at $1,260, which is a
positive sign, but we would have to wait for more U.S. economic
data and the consequent impact on the dollar to see whether we
can consistently exit the $1,220-$1,260 range," ActivTrades
chief analyst Carlo Alberto de Casa said.
    Analysts see $1,300 as a tough barrier in the short term, as
the metal has already risen 20 percent since the start of the
year, bolstered by strong physical inflows and receding
prospects in the near-term of an increase in U.S. interest
    Gold is supported largely by expectations the next U.S. rate
increase will only happen later in the year as Federal Reserve
policymakers take note of challenging global economic
conditions, Mark To, head of research at Wing Fung Financial
Group said.
    Goldman Sachs also expects "limited upside for gold pricing
given the limited room for the Fed to surprise to the downside,
limited room for the dollar to depreciate, and limited room for
China to drive (emerging markets) currency strength to
contribute to dollar weakness."
    Goldman however increased its gold price forecasts for
coming months, citing stronger net speculative positioning.
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.3
percent on Tuesday, to the highest since December 2013.
    Other precious metals also advanced, with spot silver 
gaining 1.3 percent to $17.32 an ounce, platinum up 1.8
percent at $1,065.02 and palladium rising 2.5 percent to

 (Additional reporting by Manolo Serapio Jr. in Manila; Editing
by Meredith Mazzilli)