* Gold hits record high on renewed safe-have bid
* Equity markets extend losses after Thursday's rout
* Euro jumps in thin liquidity, oil prices falter
* Bank funding concerns, recession fears drive slump
(Adds opening of U.S. markets, changes dateline; previous
By Herbert Lash
NEW YORK, Aug 19 Gold jumped to a record high
on Friday and global equity markets extended a sharp sell-off
as fears of a global recession and a funding crunch for
regional banks in Europe intensified.
Gold prices rallied more than 2.5 percent as investors
sought refuge from a second day of hefty losses in stocks as
equity markets reeled on fears of stalling economic growth
around the world.
Wall Street stocks opened sharply lower but then pared
their losses, with the S&P 500 .SPX and Nasdaq .IXIC
indices in positive territory.
"At the moment the market is just looking for relative safe
havens," said Mitsui Precious Metals analyst David Jollie. "You
can see that in the sell-offs across equity markets overnight.
The strength of gold is the other side of the coin from that."
Spot gold XAU= jumped to record $1,877 an ounce, and was
last trading near $1,855, on track for its biggest one-month
rise in nearly 12 years in August.
The euro recovered early losses in thin trade, gaining
momentum on stop-loss selling. But it remained at risk of
coming under renewed pressure from a darkening global economic
outlook and worries about funding in the euro zone banking
sector. For details see: [ID:nL5E7JJ2XH]
The U.S. dollar index .DXY slipped 0.6 percent to 73.817
as a result of a rebound in the euro EUR=, up 0.6 percent at
European shares flirted with two-year lows, the
FTSEurofirst 300 .FTEU3 index of top European shares was down
1.7 percent. MSCI's all-country world stock index
.MIWD00000PUS was off 1 percent.
"The market is very concerned about the deteriorating
outlook for global growth in general and the United States in
particular," said Marcus Svedberg, chief economist at East
Capital, which has 5 billion euros ($7.2 billion) under
On Wall Street, the Dow Jones industrial average .DJI
fell sharply at the opening, but shortly after 10 a.m. EDT, the
Dow Jones industrial average was down 16.57 points, or 0.15
percent, at 10,974.01. The Standard & Poor's 500 Index .SPX
was up 2.93 points, or 0.26 percent, at 1,143.58. The Nasdaq
Composite Index .IXIC was up 12.09 points, or 0.51 percent,
U.S. Treasury yields inched back up from lows last seen in
at least 60 years on as some investors took profits from
Thursday's bond rally. [ID:nN1E77I09T]
The benchmark 10-year U.S. Treasury note US10YT=RR was
down 14/32 in price to yield 2.11 percent. The yield at one
point on Thursday fell to 1.97 percent.
Yields have dropped almost a full percentage point on the
10-year note in August as disappointing economic data, the
Federal Reserve's low interest rate policy and jitters over
rising bank funding costs drove investors to safe-haven bonds.
Brent crude rose after Spanish measures to address Spain's
economic weakness helped to reverse some of the deep sell-off
triggered by concern the world is heading back into recession.
Brent LCOc1 was trading 9 cents higher at $107.08 a
barrel. U.S. crude CLc1 shed 96 cents to $81.45 a barrel.
(Reporting by Rodrigo Campos and Karen Brettell in New York;
Naomi Tajitsu, Nia Williams, Barbara Lewis and Jan Harvey in
London; Harro ten Wolde in Frankfurt; Writing by Herbert Lash;
Editing by Dan Grebler)