LONDON: Gold hit a seven-week high on Wednesday, extending gains for a third session as persistent concerns over the Chinese economy battered stock markets, while tensions simmered in the Korean peninsula and the Middle East.

Spot gold was up 1.2 percent at $1,090.95 an ounce at 1500 GMT, off a peak of $1,093.10, its highest since Nov. 16.

US gold futures for February delivery were up $12.50 an ounce at $1,090.90.

Silver was up 0.8 percent at $14.08 an ounce, while platinum was down 0.9 percent at $880.65 an ounce and palladiumwas down 3.3 percent at $516.72 an ounce.

Palladium prices fell to their lowest in nearly 5-1/2 years in earlier trade at $514.20 an ounce.

The autocatalyst metal, as a largely industrial commodity, is more exposed than gold to economic weakness.

Gold fell 10 percent last year on fears higher US rates would lift the opportunity cost of holding non-yielding bullion.

The Federal Reserve raised rates for the first time in nearly a decade last month and is expected to hike rates further this year.

The metal has broken through a key chart level at $1,088, which could indicate prices have bottomed for now after twice rebounding from the $1,045 area in December, analysts said.

“(The) geopolitical situation along with a cocktail of global market sell-offs is fueling this move,” Naeem Aslam, chief market analyst at Ava Trade, said.

World stocks fell for a fifth day as China fueled fears about its economy by allowing the yuan to weaken further, and a nuclear test by North Korea added to a growing list of political worries.

North Korea said it successfully tested a miniaturised hydrogen nuclear device on Wednesday, setting off alarm bells in Japan and South Korea.

“Some risk aversion prompting safe-haven flows has helped gold,” Societe Generale analyst Robin Bhar said.

“Physical demand has been pretty strong at the lower levels.”

“As we go higher, we could see some of that physical demand beginning to slow. Now we need investors to jump back in and look to hedge some of the uncertainties over global growth, over China, with positioning in gold.”

Traders will examine the minutes of the Federal Reserve’s last meeting when they are released later on Wednesday for clues about the US central bank’s plans for interest rate hikes.