* U.S. dollar extends losses with key breaches in sight
* Silver hits record near $50, sets all-time high
* U.S. stocks trade flat as economic data disappoints
* Government debt prices gain after U.S. jobless, GDP data
(Freshens prices)
By Herbert Lash
NEW YORK, April 28 (Reuters) - The U.S. dollar extended
losses on Thursday, sparking a surge in silver to record
prices, while Wall Street faltered on news of unexpectedly slow
U.S. economic growth.
Spot silver <XAG=> hit an all-time high of $49.51 an ounce
as the dollar's slide and yet another record in gold triggered
heavy speculative buying. For details see [].
Silver's record rise came after U.S. Commerce Department
data showed gross domestic product for the first quarter slowed
to a 1.8 percent annual pace, or two-tenths of a percent less
than markets had expected, a rate that turned oil prices lower.
[]
U.S. and German government debt rose after the GDP data,
which marked a sharp drop from the 3.1 percent rate in the
fourth quarter of 2010.
Adding to the economic concerns, first-time claims for U.S.
jobless benefits jumped to 429,000 last week, well above a
392,000 consensus forecast in a Reuters poll.
The dollar drifted lower a day after the U.S. Federal
Reserve emboldened bearish sentiment by signaling it would
retain its accommodative monetary policy. []
The ultra-loose policy has been a bane for the dollar. But
low U.S. interest rates have been a boon for the euro, which is
up nearly 11 percent this year.
The Fed statement and a news conference by Fed Chairman Ben
Bernanke indicated authorities plan to "monetize our debt, and
basically to devalue the dollar," said Robert Lutts, chief
investment officer of Cabot Money Management.
"The metal markets are recognizing that and it is being
priced in. What monetization means is that, down the road, we
will have more inflation," he said.
The euro rose to $1.4813 <EUR=>, after hitting a 17-month
high of $1.4882 on trading platform EBS.
The dollar was down 0.78 percent at 81.57 yen <JPY=>.
The U.S. dollar index <.DXY>, a basket of six currencies,
fell to its lowest since July 2008. It recovered slightly but
was still down 0.52 percent.
U.S. STOCKS TAKE DATA IN STRIDE
On Wall Street, stocks held up relatively well, with the
Dow industrials up 0.3 percent and the benchmark S&P 500 index
up 0.1 percent. Investors said they needed to see more data
before calling an end to the rally in equities.
The volatile weekly jobless claims may be a silver lining.
"At the moment, we regard the rise (in claims) as
technical," said Chris Rupkey, chief financial economist of
Bank of Tokyo/Mitsubishi UFJ in New York.
"We need to see initial unemployment claims fall sharply
below 400,000 in upcoming weeks to make sure the economy is not
slowing due to the latest headwind of higher gasoline prices."
The Dow Jones industrial average <> was up 34.66
points, or 0.27 percent, at 12,725.62. The Standard & Poor's
500 Index <.SPX> was up 0.95 point, or 0.07 percent, at
1,356.61. The Nasdaq Composite Index <> was down 6.34
points, or 0.22 percent, at 2,863.54.
Despite a listless market, the Nasdaq was still trading
near a 10-year closing high reached Wednesday. Both the Dow and
the S&P 500 hit fresh intraday highs on Thursday that were near
levels not seen since mid-2008.
Major world stock indexes had surged to near three-year
highs on Wednesday after Fed policy-makers signaled low U.S.
interest rates will remain in place for some time.
The MSCI index of world stocks <.MIWD00000PUS> was up 0.7
percent.
U.S. consumer spending did not slow as much as economists
had feared, leaving many hopeful of a re-acceleration in the
pace of growth in the second quarter.
"Investors are willing to look through the GDP data because
most of the weakness was beyond the consumer," said Jack Ablin,
chief investment officer of Harris Private Bank in Chicago.
Spot silver <XAG=> was up 72 cents at $48.48 an ounce.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
8/32, to yield 3.33 percent.
Brent crude futures <LCOc1> fell 53 cents to $124.60 a
barrel. U.S. light sweet crude oil <CLc1> fell 6 cents to
$112.70.
Spot gold prices <XAU=> rose $6.60 to $1,533.00.
(Reporting by Gertrude Chavez-Dreyfuss, Angela Moon and Ellen
Freilich in New York and Atul Prakash, Emelia Sithole-Matarise
and Rebekah Curtis in London; Writing by Herbert Lash; Editing
by James Dalgleish)
