LONDON, Feb 8 — Gold hit its highest level since mid-October today, 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 US$1,182.60 (RM403.20), its strongest since October 16, and was at US$1,178.76 an ounce at 1326 GMT, up 0.5 per cent.

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

The pan-European FTSEurofirst 300 was down 2.7 perc ent, 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 US$1,200, but it may take a while to test it.”

A US 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.

US gold for April delivery was up 2.1 per cent at US$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 February 2, US 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 per cent to 698.46 tonnes on Friday.

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

Silver was up 0.3 per cent at US$15.01 an ounce. — Reuters