* Gold rebounds from largest one-day fall in three weeks
* Silver rises after biggest drop in a month (Updates prices, adds comment)
By Clara Denina
LONDON, June 17 (Reuters) - Gold rose one percent on Friday, supported by a softer dollar, and was heading for a third week of gains following a cautious note from the Federal Reserve on interest rates and uncertainty ahead of Britain's vote on European Union membership.
The metal, often seen as an insurance in times of financial and economic uncertainty, peaked at $1,315.55 on Thursday, its strongest since August 2014.
Gold then slid 1 percent as financial markets reacted to the suspension of campaigning for June 23's British referendum after a lawmaker was shot dead. gold XAU= rose to $1,292.90 an ounce at 1408 GMT. Bullion has risen 1.4 percent so far this week.
U.S. gold for August delivery GCcv1 was down 0.2 percent at $1,295.50 an ounce.
"Gold is reverting to its safe-haven role, in a situation where euro zone government bonds are in negative yield territory and investors have fewer safe assets to choose from," Mitsubishi Corp strategist Jonathan Butler said.
"The other major piece of news this week has been the Fed's downgrade of GDP growth and its unchanged inflation expectations ... all of these factors are supportive of rates remaining low and ... favourable to gold."
Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding the precious metal.
Sterling-denominated gold XAUGBP=R rose to a three-year high on Thursday, while the metal priced in euros XAUEUR=R reached its highest since April 2013, due to the weakening of both currencies against the dollar ahead of the referendum.
The Bank of England escalated its warnings about fallout from the vote, saying it could harm the global economy and that sterling looked increasingly likely to weaken further if "Leave" wins. the next week until the British referendum, there could be a further upward move in gold ... as investors will use it as a hedge against various financial risks," Commerzbank (DE:CBKG) analyst Daniel Briesemann said.
The dollar slipped 0.4 percent against a basket of major currencies on Friday, making dollar-denominated assets such as gold cheaper for holders of other currencies. FRX/
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= rose 1.5 percent to $17.42 an ounce after falling 2 percent on Thursday.
Platinum XPT= rose 0.6 percent to $970 and palladium XPD= gained 0.4 percent to reach $532.63.