Gold prices surged higher above $1,600 an ounce in Europe on Monday on fears over the euro zone debt crisis and the threat of a U.S. default.

Spot gold rose as high as $1,601.80 an ounce and was up 0.5 percent at $1,601.28 an ounce at 1044 GMT. Gold rose more than 3 percent for a second straight week to Friday, a feat it has not achieved since February 2009.

Data from U.S. futures regulator the Commodity Futures Trading Commission showed on Friday that managed money sharply raised bullish bets in U.S. gold futures and options in the week ended July 12 as bullion prices rallied.

"CFTC data shows a surge into gold, so despite the higher levels the professionals have returned to gold with a vengeance," said Saxo Bank analyst Ole Hansen.

U.S. gold futures GCv1 for August delivery were up $11.90 an ounce at $1,602.00, having peaked at $1,602.50.