UPDATE 1-Dairy prices inch up, volumes fall at auction -GDT Events

(Updates throughout)

WELLINGTON, July 19 (Reuters) - Global dairy prices inched up at auction, rebounding slightly from a fall at a similar sale earlier in the month, according to Global Trade Events which holds the fortnightly auction.

The Global Dairy Trade (GDT) Price Index edged up 0.2 percent, with an average selling price in the auction of $3,387 per tonne.

The index had slipped 0.4 percent at the previous sale, moderating after a strong run earlier in the year.

After two years of declining prices, farmers and analysts had been concerned that a 50 percent rebound during 2016 could be temporary, but prices got back on track in recent months as global supply tightened.

"Dairy prices were largely unchanged overnight," ASB said in a research note. "Butter prices set a fresh record high ... this is the tenth time that butter has set a new record high this year."

Gains were led by butter, which jumped 3.4 percent, while whole milk powder, the key export for New Zealand was up 0.3 percent.

That was offset by a 3.2 percent fall in skim milk powder and a 1.8 percent decline in lactose.

The auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the country's gross domestic product.

The New Zealand dollar, however, was little changed on the day at $0.7345.

GDT Events is owned by New Zealand's Fonterra Co-operative Group Ltd, the world's largest exporter of dairy, but operates independently from the company.

U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.

A total of 26,688 tonnes was sold at the latest auction, falling 6.6 percent from the previous one. The auctions are held twice a month, with the next one scheduled for Aug. 1. (Reporting by Ana Nicolaci da Costa, editing by G Crosse)