PRECIOUS-Gold up 1.7 pct as investors dump stocks

* U.S. gold, spot bullion extend gains, hit record

* Asia stocks nosedive, Swiss franc near peak

* Coming Up: U.S. FOMC rate decision Jun; 1815 GMT

(Updates prices, adds details)

By Lewa Pardomuan

SINGAPORE, Aug 9 (Reuters) - Bullion gained 1.7 percent on
Tuesday, roaring to all-time highs for a second consecutive
session as equity markets dived on growing fears of a global
recession after last week's cut in the United States's credit
rating.

Stock markets in Asia plummeted and the Swiss franc held
near a record high after investors fled riskier assets in a
global sell-off ignited by fears that political leaders are
unable to tackle debt crises in Europe and the United States.

As investors exited stocks for bonds and bullion, holdings
of the SPDR Gold Trust registered their biggest one-day
gain in more than a year on Monday, sending the price of gold to
a premium over traditionally more expensive platinum.

U.S. gold futures for December GCcv1 struck a record
around $1,746 an ounce, while cash gold hit an all-time
high about $1,742 an ounce, its 12th record in 20 sessions.

"Markets are now worried about another global recession. Out
of Europe, French bond yields have widened on expectation of
sovereign debt downgrade because of the country's exposure to
peripheral European debt," said Natalie Robertson, a commodities
strategist at ANZ.

"I think everyone was also looking at the 7 percent drop in
the S&P 500. The market was very concerned over the global
economy. Gold is now more expensive than platinum, and the last
time this happened was back in December 2008. That's an
interesting dynamic."

Gold rallied more than 3 percent on Monday, exceeding $1,700
an ounce for the first time after Standard & Poor's cut the U.S.
credit rating to AA-plus, setting off an investor stampede for
safety.

The cost of insuring French debt against default rose on
Monday after the downgrade raised questions over how long other
countries could hold onto their top-notch ratings.

Silver ticked down below $40 an ounce after Monday's
gains. Platinum and sister metal palladium tracked
equities lower because of their industrial use as auto catalysts
and fears a global recession could slash automobile demand.

Adjusted for inflation, gold is one of the few elements of
the commodity complex trading below its all-time highs,
estimated at $2,500 an ounce.

The CBOE Gold ETF Volatility Index , often
referred to as the "Gold VIX" and based on SPDR Gold Trust
options, jumped 30 percent to its highest since late
2010.

Investors await the Federal Open Market Committee meeting on
Tuesday for clues to whether the Fed might ease monetary policy
further.

"The market's near-term focus will be on further ratings
downgrades to come," said Tom Pawlicki, precious metals and
energy analyst at MF Global.

"The FOMC meeting is today, and any potential action to
implement further easing will also offer support. In the
background, support will come from central bank buying,
investment inflows, and weakness in economic data."

Economists at top financial institutions have scaled back
expectations for U.S. economic growth this year and offer a
nearly one in three chance the Fed will embark on another round
of Treasuries purchases in the next two years, a Reuters poll
found.

JP Morgan said on Monday it expected spot gold to
climb to $2,500 an ounce or higher by year-end, on very high
volatility, following the downgrade of U.S. debt. The U.S. bank
said its previous estimate of $1,800 was "too conservative".

The prospect of an even longer period of low U.S. interest
rates prompted Goldman Sachs to raise its three-month
forecast for the gold price by about $100.

Precious metals prices 0157 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1739.59 24.09 +1.40 22.55
Spot Silver 38.82 -0.15 -0.38 25.79
Spot Platinum 1707.99 -3.91 -0.23 -3.37
Spot Palladium 711.47 -3.28 -0.46 -11.01
TOCOM Gold 4328.00 40.00 +0.93 16.06 68418
TOCOM Platinum 4281.00 -54.00 -1.25 -8.84 10474
TOCOM Silver 96.20 -3.50 -3.51 18.77 605
TOCOM Palladium 1765.00 -62.00 -3.39 -15.83 689
COMEX GOLD DEC1 1631.20 15.00 +0.93 14.76 136930
COMEX SILVER SEP1 40.11 0.31 +0.78 29.63 44407
Euro/Dollar 1.4185
Dollar/Yen 77.30

TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months

(Reporting by Lewa Pardomuan; Editing by)