* Dollar resumes rise after Trump comments last week
* Trump spat with Iran has little effect on gold prices
* Gold hovers above strong technical support at $1,200-$1,220
* Prices likely to revive towards $1,300 -Reuters poll
By Devika Krishna Kumar and Peter Hobson
NEW YORK/LONDON, July 23 (Reuters) - Gold prices fell toward one-year lows on Monday as the U.S. dollar held on to strength against the currencies of key bullion consumers China and India. CNY= INR=
Gold has tumbled 10 percent since mid-April as a surge in the greenback made dollar-priced bullion more expensive for buyers with other currencies. .DXY FRX/
There was some respite for gold last week when U.S. President Donald Trump branded the dollar's strength as bad for the economy, knocking the currency from one-year highs, but the breather proved short-lived. seeing a bid in the dollar that's driving the gold low today, but we do think the dollar is set to weaken going forward, so we do see gold trading higher on the near term, two to three months outlook," said Daniel Ghali, commodities strategist at TD Securities.
Spot gold XAU= was down 0.5 percent at $1,224.67 an ounce by 2:36 p.m. EDT (1836 GMT), close to last Thursday's low of $1,211.08, while U.S. gold futures GCcv1 for August delivery settled down 0.4 percent at $1,225.60.
A war of words between Trump and Iranian President Hassan Rouhani helped to lift prices only briefly.
Trump, in a tweet, told Rouhani on Sunday to "NEVER, EVER THREATEN THE UNITED STATES AGAIN" after Rouhani said that hostile U.S. policies towards Tehran could lead to "the mother of all wars". instability often boosts gold, traditionally seen as a safe place to invest in times of uncertainty.
Gold's plunge in recent months has led banks and brokerages to downgrade their average gold price forecasts for this year and next, according to a Reuters poll published on Monday. respondents still expect the metal to bounce back towards $1,300 an ounce.
One potential positive is a swing in speculative positioning that has seen funds' net short on the Comex exchange grow to its largest since January 2016. 3088691MNET extreme positioning has frequently been an indicator of a pronounced countermovement in the near future," Commerzbank (DE:CBKG) analysts wrote.
Gold is also cushioned by technical support around $1,200-$1,220, including its July 2017 low of $1,204.90, the 50 percent Fibonacci retracement of the 2016 rally and the psychologically significant level of $1,200.
"I doubt if the dollar will be able to hold onto its gains following last week's price action, so I am expecting gold to at least go a little higher this week with resistance coming in at $1,236 being our short-term bullish objective," said Fawad Razaqzada, Forex.com market analyst.
Silver XAG= was down 0.85 percent at $15.34 an ounce after last week's drop to its lowest since July last year. Respondents to the Reuters poll forecast that silver would rebound and average $16.70 this year. XPT= was little changed at $826.50 an ounce after last week touching its lowest since 2008, while palladium XPD= rose from last week's one-year low and was up 2.2 percent at $913.5.
Prices of both metals are likely to recover from the current levels, with platinum expected to average $922 an ounce this year and palladium to average $1,000, a Reuters poll found. (Additiongal reporting by Renita D. Young in New York Karen Rodrigues in Bengaluru Editing by Dale Hudson, David Goodman and Frances Kerry)