* Gold hits highest since January 2015 as dollar falls
* Silver set for biggest monthly gain since August 2013
* Platinum reaches strongest since July last year
* Palladium at highest since early November
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
(Updates prices; adds comment, second byline, NEW YORK
dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, April 29 (Reuters) - Gold and silver prices
rallied 2 percent to their highest since January last year on
Friday as the Bank of Japan's decision the previous day to hold
off expanding monetary stimulus weighed heavily on the dollar,
and European and U.S. stocks fell.
The yen hit an 18-month peak versus the U.S. currency and
was on course for its biggest weekly gain since the 2008
financial crisis, with poor U.S. growth and the Federal
Reserve's cautious stance this week weighing on the dollar.
FRX/
Spot gold XAU= was up 2 percent at $1,291.11 an ounce at
2:16 p.m. EDT (1816 GMT), having reached a 15-month high of
$1,296.76. U.S. gold futures GCv1 for June delivery settled up
1.9 percent at $1,290.50 an ounce.
For the week, the metal is up 4.8 percent in what is set to
be its biggest weekly rise since the week ended Feb. 12.
"All the precious metals are up quite strongly on the back
of weakness in the dollar, after poor GDP data in the United
States and a lack of action by the Bank of Japan," Capital
Economics analyst Simona Gambarini said.
"There could be a correction in the price if the dollar
starts strengthening again, but we remain positive on gold."
The Fed's policy statement on Wednesday, after leaving
interest rates unchanged, also supported gold. The U.S. central
bank showed little sign it was in a hurry to tighten monetary
policy.
Gold is sensitive to rising interest rates, which lift the
opportunity cost of holding non-yielding bullion, while boosting
the dollar, in which it is priced.
"We believe we are not transitioning to a risk-off world,
but simply to a less risk-on one, as lower real rates should
stabilize and require stronger global data to then lift interest
rates and risk in tandem," said TD Securities in a note.
Silver XAG= was up 1.5 percent at $17.80 an ounce, having
touched its highest since January 2015 at $17.96 and being on
track to rise 15.3 percent this month, its biggest gain since
August 2013 as it plays catch-up after lagging gold during its
first-quarter surge.
The gold/silver ratio, which measures the number of silver
ounces needed to buy an ounce of gold, fell to a six-month low
on Friday of 71.8, down from 81.3 at the start of the month.
Platinum XPT= was up 2.5 percent at $1,071.49 an ounce,
off an earlier 10-month high of $1,080, while palladium XPD=
rose by as much as 2.3 percent to $634.96 an ounce, the highest
in nearly six months.
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