* Silver breaches $19 level for the first time since Sept
2014
* Platinum, palladium mark highest since mid-May
(Updates prices)
By Clara Denina
LONDON, July 1 (Reuters) - Gold climbed on Friday and was
heading for its fifth weekly gain, supported by a weaker dollar
and prospects for further monetary policy easing in the wake of
Britain's vote to leave the European Union.
Spot gold XAU= rose to a session high of $1,341.40 an
ounce, and was 1.2 percent higher at $1,336.01 by 1415 GMT. The
metal gained 8.8 percent in June, its biggest monthly rise since
February.
Gold's strength benefited silver XAG= , which breached the
$19 an ounce level on Friday for the first time since September
2014. It rose as much as 3.8 percent to $19.40 and traded 3.3
percent higher at $19.28. Silver was on track for its best week
since August 2013 having gained more than 8 percent so
far.
"For gold, the initial reaction was safe-haven demand due to
the uncertain political situation in Europe, but then the latest
move might be more of a reaction to comments from central banks
that they are moving to an easing bias," Danske Bank senior
analyst Jens Pedersen said.
The dollar fell 0.4 percent against a basket of six
currencies .DXY , while European stocks recovered on signs that
central banks such as the Bank of England, the Bank of Japan and
the European Central Bank will loosen monetary conditions even
further. MKTS/GLOB
Concerns about the global economy have made a U.S. rate rise
in coming months less likely, analysts say, but much will depend
on U.S. economic data and markets will be watching non-farm
payrolls due on July 8 in particular for clues. ECONUS
"Gold is rallying as expectations are once again rising for
another central bank easing cycle. Could next week's non-farm
payrolls stop this? The last two were very weak, but we think
misleading and some other U.S. data has been improving,"
Macquarie analyst Matthew Turner said.
"But the Fed's reaction function appears to have changed,
and we doubt they have much appetite to raise rates until
December," Turner said.
Low U.S. interest rates are positive for gold because the
opportunity cost of holding it decreases and the dollar
typically falls, making the metal cheaper.
Societe Generale (PA:SOGN) raised its gold price forecasts on Thursday
on concerns about the ongoing political, financial and economic
fallout of Britain's vote last week to leave the European Union.
Platinum XPT= marked its highest level since May 18 at
$1,050.80 an ounce and was on track for its best weekly rise
since the end of April.
Palladium XPD= , heading for its best week since early
March, rose to its highest since May 13 at $601, and was up 0.6
percent at $596.20.
(Additional reporting By Nallur Sethuraman and Vijaykumar
Vedala in Bengaluru; editing by Susan Fenton and David Clarke)