* Spot gold may not bottom until $1,250-$1,200: analyst
* Bullion sold at premium in India (Updates prices; adds comment, byline, NEW YORK to dateline)
By Renita D. Young and Eric Onstad
NEW YORK/LONDON, June 22 (Reuters) - Gold prices rose from six-month lows on Friday as the dollar slipped, but the modest nature of the recovery suggested speculators might still be poised to punish the metal further.
Spot gold XAU= gained 0.2 percent at $1,268.76 per ounce by 1:34 p.m. EDT (1734 GMT), headed for a 0.8 percent weekly drop. In the prior session, bullion touched $1,260.84, its lowest since Dec. 19, 2017.
U.S. gold futures GCcv1 for August delivery settled up 20 cents, 0.02 percent, at $1,270.70 per ounce.
"Gold is up with the dollar being a little weak today," said Michael Matousek, head trader at U.S. Global Investors.
A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.
Subdued gold reaction shows there's more downside risk, said Georgette Boele, commodity strategist at ABN AMRO (AS:ABNd) in Amsterdam.
"People think since gold failed at the $1,300 level, they are seeing how far they can push it down and then move it up again. I would say it should bottom out anywhere between $1,250 and $1,200," Boele said.
Gold tumbled last Friday after repeatedly failing to surmount the $1,300 level as speculators rushed to liquidate long positions and others added bearish positions.
The dollar dropped from an 11-month peak against a currency basket as the euro strengthened after a survey showed Euro zone private business growth recovered in June. USD/ agreed gold was unlikely to recover in the near-term.
"If gold is not even in demand as a result of the escalating trade dispute between the U.S. and China, we do not believe that the other upcoming events will do much to sway the opinion of market participants," a note from the German bank said.
In Asia, gold demand picked up in most centers this week, with bullion selling at a premium in India for the first time in seven weeks. XPT= increased 1 percent at $870.24 per ounce, poised for a weekly drop of over 1 percent.
Palladium XPD= gained 0.3 percent at $953.50 per ounce, headed for a weekly drop of more than 3 percent.
Earlier in the session, platinum touched $851.74, the weakest since February 2016, while palladium slipped to a seven-week low of $947.15 an ounce.
Silver XAG= was up 0.8 percent at $16.44 an ounce after falling to its lowest since May 2 at $16.16 in the previous session, headed for a 0.3 percent weekly drop.