LONDON, May 16 (Reuters) - Gold steadied on Wednesday after
a surge in the dollar and U.S. bond yields in the previous
session had pushed prices down 1.7 percent to their lowest this
year. 
    Tuesday's fall was the biggest since November 2016. Gold
crashed below its technically important 200-day moving average
and the psychologically significant $1,300 mark to $1,288.31,
the weakest since Dec. 28. 
    "Rising U.S. bond yields and a stronger dollar were factors
behind gold's decline below the $1,300 level, said National
Australia Bank economist John Sharma. 
    "The slight pick up (on Wednesday) suggests there might have
been some opportunistic buying on the part of investors."     
    Spot gold        was up 0.1 percent at $1,290.86 an ounce at
1104 GMT, while U.S. gold futures         for June delivery were
flat at $1,290.30.
    A stronger dollar hurts gold by making it more expensive for
holders of other currencies, while higher bond yields make
non-yielding bullion less attractive to investors. 
    The dollar rose further on Wednesday to a new 2018 high,
while yields on 10-year Treasuries slipped back from a 7-year
peak.                                
    Yields and the dollar are likely to rise further, pushing
gold to $1,275 by the end of June and $1,250 by year end, below
the $1,310-$1,360 range it has inhabited since January, said ABN
AMRO analyst Georgette Boele. 
    "Gold held up for so long on such a high level. Now you are
below $1,300 and the 200-day moving average, people who hold
long positions are a little bit nervous," she said.   
    Technical and momentum indicators suggested gold could fall
to around $1,278, said analysts at ScotiaMocatta. Fibonacci
support for the metal was at $1,287, they said.
    Investors largely disregarded news that North Korea had
called off high level talks with South Korea due on Wednesday,
less than a month before a planned summit between Kim Jong Un
and U.S. President Donald Trump.             
    "There are lot of geopolitical risks but people are just
used to it. Therefore it has not become a big driver for gold,"
said Argonaut Securities analyst Helen Lau.
    In other precious metals, silver        was up 0.2 percent
at $16.26 an ounce after falling 1.6 percent on Tuesday.
    Platinum        was 0.3 percent higher $895.70 an ounce and
palladium        lost 0.2 percent to $980.72 an ounce.
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