LONDON (Reuters) - Gold eased on Friday after soaring 4 percent the previous day, but was still set for its best week in four years, lifted by stock market turmoil that has sent investors rushing for safe haven assets.

An employee arranges gold jewellery in the counter as her arm is reflected in the mirror at a gold shop in Wuhan, Hubei province, in August 25, 2011 file photo. REUTERS/Stringer/Files

Spot gold XAU= was down 1 percent at $1,234.30 an ounce by 1423 GMT, but has still risen more than 5 percent this week, the biggest weekly gain since October 2011.

“Gold could test $1,260 or even $1,300 in the next few weeks, but I wouldn’t be surprised if we also see some profit-taking,” said Commerzbank analyst Carsten Fritsch.

Prices fell on Friday as the dollar extended gains after better than expected U.S. retail sales data.Prices hit a one-year high of $1,260.60 on Thursday.

The precious metal has benefited, along with bonds and the Japanese yen JPY=, from a rush to safety as investors worry about the health of some banks, financial instability and the potential for global recession.

They have been unnerved since the Bank of Japan, followed by Sweden this week, introduced negative interest rates to try to stimulate growth.

Gold has also been boosted by a scaling back of expectations for U.S. interest rate rises and even the possibility of rate cuts if economic conditions deteriorate.

“The sharp repricing of risk assets lower over the past week, has led to more outflows from credit and now equity funds,” Bank of America Merrill Lynch said in a note.

“Money market, government bonds and gold funds have been the main beneficiaries of the recent turmoil.”

U.S. Federal Reserve Bank of New York President William Dudley is due to speak at 1500 GMT on Friday and investors will be watching for signals on the outlook for monetary policy.

Safe-haven assets have shone across the board in the past few days as equities plunged. U.S. 10-year Treasury yields hit their lowest since 2012 and the Japanese yen climbed to its highest in 15 months against the dollar, while money continued to flow into gold-backed exchange-traded funds.

U.S. gold futures GCcv1 have risen more than 7 percent for the week, the sharpest jump since 2008.

SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.99 percent to 716.01 tonnes on Thursday from 702.03 tonnes on Wednesday. That was the biggest daily inflow since Dec. 18.

Total holdings of the top eight gold ETFs HLDTOTALL=XAU have risen by 3.8 million ounces so far this year after three straight years of decline.

Silver XAG= was down 0.4 percent at $15.68 an ounce, slipping from the $15.95 three-month high touched on Thursday.

Platinum XPT= dipped by 0.2 percent at $958 an ounce after reaching its highest since November on Thursday. Palladium XPD= was up 0.4 percent at $523.50.