* Gold breaks key resistance at last October's high
* 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
(Adds comment, details, updates prices)
By Susan Fenton
LONDON, Feb 8 The price of gold jumped more than
2 percent on Monday to touch its highest level since June,
extending last week's sharp gains, as sliding stock markets and
worries over global economic growth prompted investors to seek
safety in hard assets.
Spot gold reached a peak of $1,198.70 an ounce, its
strongest since June 22, after breaking key resistance at its
October high at $1,190.63. By 1515 GMT it was up 2 percent at
$1,196.9 an ounce.
"We are seeing non-stop buying from the investment community
and little selling of note," one trader said, adding that
exchange-traded funds and other investment funds were moving
into gold as a safe haven.
U.S. share prices fell more than 1 percent and European
stocks hit a 16-month low as weakening oil prices and concerns
about a global economic slowdown unnerved investors.
Traders said gold's 5 percent gain last week, its biggest
weekly rise since July 2013, had also made many investors more
convinced that the metal's rally since the start of this year
Its next major resistance level would be $1,120 an ounce.
Gold has now risen more than 12 percent since the start of
2016, reversing last year's 10.4 percent loss.
"The main driver today is the slide in equity markets," said
Societe Generale analyst Robin Bhar.
"There were headlines in the newspapers at the weekend about
the risk of a global recession and there is general risk
aversion sweeping through financial markets."
Some recent weak economic data, particularly from the United
States and China, has led financial markets to expect there will
be fewer U.S. rate hikes this year than the four they had been
pricing in a few weeks ago, perhaps only one.
Lower rates cut the opportunity cost of holding gold, which
earns no yield but costs to store and insure.
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
Gold, however, will be lacking support from Chinese physical
buying in this Lunar New Year holiday week, analysts said.
U.S. gold for April delivery was up nearly 3 percent
at $1,191.5 an ounce.
Other precious metals tracked gold higher. Platinum
was up 1.5 percent at $921.33, after reaching $926.63, its
highest since Nov. 9, while palladium was up 1.2 percent
at $506.72 an ounce.
Silver jumped 2.4 percent to $15.33 an ounce, after
briefly touching $15.43, its highest since Nov. 3.
(Editing by Susanna Twidale and Greg Mahlich)