NEW YORK/LONDON: 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 XAU= rose 0.8 percent to $1,275.50 an ounce by 2:03 p.m. EDT (1803 GMT), while US gold for June delivery GCcv1 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 28.

"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 .DXY, set to snap a six-session rally. The weak greenback makes dollar-priced assets such as gold cheaper for holders of other currencies.

US 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 US 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 US interest rates.

Gold is supported largely by expectations the next US 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 (GLD), the world's largest gold-backed exchange-traded fund, said its holdings HLDSPDRGT=XAU rose 0.3 percent on Tuesday, to the highest since December 2013. [GOL/ETF]

Other precious metals also advanced, with spot silver XAG= gaining 1.3 percent to $17.32 an ounce, platinum XPT= up 1.8 percent at $1,065.02 and palladium XPD= rising 2.5 percent to $605.63.