TREASURIES-Prices gain before seven-year note sale
* Prices gain as Fed speakers, weak data help stabilize markets
* Treasury will sell $29 billion of seven-year notes
* Fed will buy $4.25 billion to $5.25 billion in notes due 2017, 2018
NEW YORK, June 27 (Reuters) - U.S. Treasuries prices gained on Thursday as bond markets showed more signs of stabilizing after a dramatic selloff and before the Treasury's sale of $29 billion in new seven-year notes, the final sale of $99 billion in new coupon-bearing supply this week. Treasuries have held a firmer tone this week after being roiled last week when Fed Chairman Ben Bernanke said the U.S. central bank is likely to pare back its bond purchase program later this year if the economy continues to improve. Downward revisions to first quarter gross domestic product data on Wednesday led some investors to speculate that a pullback of stimulus may still be far away. Speeches from Federal Reserve officials in recent days have also sought to soothe the markets with statements that the removal of stimulus is likely to be slow, and data dependent. "The Fed has made efforts to talk the market back from those assumptions," that the Fed is likely to start paring its bond purchases in September, said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford, Connecticut. Federal Reserve Bank of New York President William Dudley is scheduled to give remarks on the national and regional economy before a briefing on labor market conditions for recent college graduates at 10:00 a.m. (1400 GMT) while Atlanta Fed President Dennis Lockhart is due to speak on the economic outlook at 12:30 p.m. (1630 GMT). The Fed will buy between $4.25 billion and $5.25 billion in notes due 2017 and 2018 on Thursday as part of its ongoing purchase program. Benchmark 10-year note yields have backed away from 22-month highs of 2.67 percent reached on Monday to trade at 2.49 percent on Thursday. The notes' yields nonetheless remain significantly higher than the 2.20 percent area they traded at before Bernanke's comments, and from 1.60 percent at the beginning of May. Treasuries briefly extended price gains on Thursday after data showed that U.S. jobless claims fell in the latest week and consumer spending rose in May. The stronger tone may help the Treasury's sale of the new seven-year notes on Thursday, though a weak sale of five-year notes on Wednesday showed that jitters remain over buying the intermediate-dated debt. Five- and seven-year notes are the most sensitive to Fed interest rate policy and have been the weakest performers in the recent selloff. The $35 billion five-year note sale saw the lowest demand since September 2009, with a bid-to-cover ratio of 2.45 times. Thursday's seven-year auction, however, may be boosted by month-end extension buying as well as from being the last of the three auctions this week. Traders expect the new seven-year notes to price at yields of 1.93 percent, according to trading in the "when-issued" market, around one basis point higher than the notes are trading in the secondary market at 1.92 percent .