Home / News / PRECIOUS-Gold hits highest in nearly 4 months as stockmarkets slide

PRECIOUS-Gold hits highest in nearly 4 months as stockmarkets slide

* Gold extends gains after rising 5 pct last week

* Gold ETF holders add to physical position -SPDR

* Speculators boost bullish bet in COMEX gold to 3-month top (Updates prices throughout, adds comment)

By Susan Fenton

LONDON, Feb 8 (Reuters) – Gold hit its highest level since mid-October on Monday, extending its biggest weekly rise since July 2013 as sliding stock markets and global growth uncertainty prompted investors to seek safety in hard assets.

Spot gold reached a peak of $1,182.60, its strongest since Oct. 16, and was at $1,178.76 an ounce at 1326 GMT, up 0.5 percent.

The metal climbed 5 percent last week and has risen more than 10 percent since the start of 2016, reversing last year’s 10.4 percent loss.

The pan-European FTSEurofirst 300 was down 2.7 percent, hitting its lowest since October 2014 on worries about economic growth.

“There’s certainly continued elevated volatility coming from oil prices, weaker equities,” said ETF Securities analyst Martin Arnold. “We think there is more upside. The next big level is $1,200, but it may take a while to test it.”

A U.S. jobs report on Friday suggested the world’s biggest economy could be strong enough for the Federal Reserve to lift interest rates at some point, but financial markets expect there will be fewer hikes this year than the four they had been pricing in a few weeks ago.

Lower rates cut the opportunity cost of holding gold, which earns no yield but costs to store and insure.

“The rally is starting to look overextended from a technical point of view and gold will crucially be lacking support from Chinese physical buying in this Lunar New Year holiday week,” Mitsubishi analyst Jonathan Butler said in a research note.

U.S. gold for April delivery was up 2.1 percent at $1,182.1 an ounce.

Hedge funds and money managers boosted their bullish bet in COMEX gold to a three-month high in the week to Feb. 2, U.S. Commodity Futures Trading Commission data showed on Friday.

Positive sentiment was also boosted by SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, which said its holdings rose 0.7 percent to 698.46 tonnes on Friday.

Across other metals, platinum which tracked gold higher last week, was up 0.3 percent to $909.89 while palladium fell 1.3 percent to $494.65 an ounce.

Silver was up 0.3 percent at $15.01 an ounce. (Editing by Jan Harvey and Susanna Twidale)

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