* Gold climbs for second straight day
* U.S. stocks turn lower, dollar held in narrow range
* GRAPHIC-2016 asset returns: reut.rs/1WAiOSC
(Updates prices, adds comment)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, Feb 18 Gold prices rose just
over 2 percent on Thursday afternoon, reversing earlier losses
and lifting silver, as U.S. equities resumed their downward
spiral, renewing bullion's safe-haven appeal that has spurred
the market's biggest rally in years.
On Wall Street, equities snapped a three-day rally, after a
slump in shares of Wal-Mart Stores weighed on retail stocks and
oil prices retreated.
"The equities pulled back. Gold popped," said Bob Haberkorn,
senior market strategist at RJO Futures in Chicago.
"While equities are starting to come back and oil's shown a
little bit of life, gold is strengthening as the day goes on.
The sentiment in gold right now is overwhelmingly bullish."
Spot gold was up 2.1 percent at $1,234.50 an ounce at
2:57 EST (1957 GMT), after steadily rising $35 off the intraday
lows. The recovery put it closer to the one-year highs around
$1,260 hit a week ago.
U.S. gold futures for April delivery settled up 1.2
percent at $1,226.30.
Silver recovered earlier losses and was up 1.3
percent at $15.48.
"That turning point midday, you had stocks sell off a little
bit. Now gold has turned up pretty meaningfully," said Rob
Haworth, senior investment strategist for U.S. Bank Wealth
management in Seattle.
"Gold's working as a safe haven trade right now in this era
of negative interest rates in Europe, Japan, Sweden and
A gauge of stocks around the globe edged higher, extending
its best run of the year, as hopes for a stabilization in oil
prices lifted emerging markets, while earnings in Europe and the
United States limited gains.
Financial market volatility has increased expectations that
the U.S. Federal Reserve may hold off hiking interest rates
further this year.
Some traders attributed the buying to high-speed
computer-driven algorithmic trading.
"The sellers seem to have disappeared," said Tai Wong,
director of base and precious metals trading for BMO Capital
Markets in New York, adding that a settlement above $1,230 "will
get the bulls aroused again."
Gold has risen almost 20 percent since hitting near six-year
lows in December for its steepest gains in years.
Inflows into gold-backed exchange-traded funds (ETFs),
holdings of which have already risen this year by more than they
fell in the whole of 2015, showed investor appetite has
sharpened, analysts said.
Platinum was up 0.04 percent to $942.99 per ounce and
palladium was down 1.5 percent to $503.51.
(Additional reporting by A. Ananthalakshmi in Singapore and
Josephine Mason in New York; Editing by Marguerita Choy and Alan