* Gold rebounds from largest one-day fall in 3 weeks
* Silver rises after biggest drop in a month
* Coming up: U.S. housing starts at 1230 GMT (Adds comments, updates prices)
By Vijaykumar Vedala
BENGALURU, June 17 (Reuters) - Gold edged up on Friday, supported by a softer dollar, after falling the most in three weeks during a volatile session before that saw bullion scale a near two-year high before surrendering some gains.
The safe-haven asset breached $1,300 an ounce on Thursday and peaked at $1,315.55 - its strongest since August 2014 - before sliding 1 percent following the suspension of campaigning for next week's British referendum on exiting the European Union after a member of Parliament was shot dead. gold XAU= was up 0.5 percent at $1,284.41 an ounce at 0736 GMT. Bullion has risen nearly 1 percent for the week so far.
U.S. gold for August delivery GCcv1 fell 0.8 percent to $1,287.70 an ounce.
"We expect gold will be keenly sensitive to perceived shifts in public opinion ahead of the referendum. This likely leaves gold prices open to highly volatile trading," HSBC analyst James Steel said in a note.
"Shifts in how investors perceive the outcome of the referendum could help define gold's near-term price path."
Gold could get a further boost if a vote by Britain on June 23 to leave the 28-member European Union pushes Europe back into a recession, as investors seek safe-haven assets.
The Bank of England escalated its warnings about fallout from the referendum, saying it could harm the global economy and that sterling looked increasingly likely to weaken further after any "Out" decision. into the Brexit vote, we expect gold to remain around current levels between the $1,270-$1,300 range. But after then all bets are off as everything depends on the results of the referendum," ANZ commodity strategist Daniel Hynes said.
"If UK does leave the EU we could see prices touching $1,400 in the immediate aftermath of the referendum," Hynes said.
The dollar slipped versus a basket of major currencies on Friday, making dollar-denominated assets such as gold cheaper for holders of other currencies. USD/
Reflecting renewed optimism towards gold, holdings in SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose to 902.53 tonnes on Thursday, the highest since October 2013. GOL/ETF
Silver XAG= , which slid 2 percent for its biggest one-day fall in about a month on Thursday, rose 1.5 percent to $17.39 and was nearly flat for the week.
Platinum XPT= and palladium XPD= were headed for a weekly decline despite rising on Friday by 1.7 percent and 2 percent, respectively.