* Euro drops as euro-zone finance ministers meet
* Gold at record high, silver above $30/oz, oil at 2-yr high
* U.S. Treasury debt prices buoyed by Bernanke's remarks
(Updates with U.S. markets close, Nikkei futures)
By Manuela Badawy
NEW YORK, Dec 6 (Reuters) - The euro tumbled against the
dollar on Monday, gold rose to a record high and silver hit a
30-year high as fears remained about Europe's sovereign debt
problems amid speculation the United States may extend
monetary easing.
Investors rushed to buy gold and silver, pushing spot gold
prices to an all-time high at $1,429.40 an ounce, and driving
U.S. silver futures front-month contract above $30 an ounce
for the first time since 1980.
On Wall Street, the Dow and the S&P 500 ended slightly
lower as investors took profits while oil futures closed at
their highest in more than two years near $90 a barrel.
U.S. Treasury debt prices rose, prompted by safe-haven
bids after Federal Reserve Chairman Ben Bernanke said on
Sunday the Fed may buy more than the $600 billion in U.S.
government bonds it has committed to purchase, if the economy
failed to respond. []
"The U.S. showed you need to take extremely strong actions
to overcome the threat of a broad financial crisis," said Rick
Meckler, president of investment firm LibertyView Capital
Management in New York.
"The feeling was Europe has only gone about two-thirds of
the way, and there was some hope they will go to a full-
throttle protection plan."
Euro-zone finance ministers met on Monday amid pressure to
increase the size of a 750-billion-euro ($1 trillion) safety
net for debt-stricken members in hopes of halting potential
contagion to other countries. []
But EU paymaster Germany, Europe's biggest economy,
rejected any such moves and also dismissed a call by two
veteran finance ministers for joint euro bonds guaranteed by
all governments.
Last week, Ireland became the second country after Greece
to require an EU/IMF financial rescue. Some diplomats say
putting more money on the table now might be interpreted as a
sign that the EU is preparing for a possible bailout of Spain,
the euro zone's fourth-largest economy, and could aggravate
market tensions.
Stocks and the euro have moved in tandem of late with the
euro looked at as a proxy for regional debt concerns.
The Dow Jones industrial average <> slipped 19.90
points, or 0.17 percent, to close at 11,362.19. The Standard &
Poor's 500 Index <.SPX> fell 1.59 points, or 0.13 percent, to
1,223.12. But the Nasdaq Composite Index <> ended up 3.46
points, or 0.13 percent, at 2,594.92.
The pan-European FTSEurofirst 300 index of European
shares <>, added 0.13 percent to end at 1,105.41 as the
shares of major oil companies got a lift from strong crude
prices.
U.S. crude oil futures <CLc1> posted their highest close
in more than two years, gaining 19 cents, or 0.21 percent, to
settle at $89.38 a barrel. Oil prices got a lift from
Bernanke's comments raising the possibility of more
quantitative easing, as well as from a cold spell in Europe
and in parts of the United States that created greater heating
demand.
The MSCI world equity index <.MIWD00000PUS> shed 0.11
percent to 321.78, while the December futures contract for the
Nikkei 225 stock index <0#NK:> trading in Chicago fell 145
points to 10,175.
EURO DROPS, COMMODITIES SOAR
The euro <EUR=> fell 0.84 percent to $1.3300, its first
decline in four sessions, as euro-zone finance ministers come
under pressure to find a common approach to ease the region's
debt crisis after an 85-billion-euro aid package for Ireland
failed to calm markets.
The dollar gained against a basket of currencies, with the
U.S. Dollar Index <.DXY> up 0.34 percent at 79.654. Against
the Japanese yen, the dollar <JPY=> was up just 0.02 percent
at 82.65 from a previous session close of 82.620.
Meanwhile, spot gold prices <XAU=> rose to an all-time
high at $1,429.40 an ounce and U.S. silver futures <SIH1>
climbed above $30 an ounce, the highest level since 1980, on
worries about the European debt crisis.
"If you have money to put somewhere, you can either put it
in one of the smaller currencies like Canadian dollar or Swiss
franc or you can put it in an alternative currency like gold
or silver, and that's what is happening here," said Sterling
Smith, an analyst at Country Hedging Inc., in St. Paul,
Minnesota.
"I can see that continuing. Until I see real resolution to
the European debt crisis, money will find its way into
precious metals."
U.S. Treasury debt prices rose, yet gains were limited as
investors prepared for this week's $66 billion in
coupon-bearing supply. Traders have also been selling into
strength, either to lock in short-term profits or to unwind
earlier positions tied to the Fed's latest quantitative easing
program, dubbed QE2.
The benchmark 10-year U.S. Treasury note <US10YT=RR>
climbed 23/32 in price, with the yield at 2.926 percent. The
2-year U.S. Treasury note <US2YT=RR> rose 3/32, with the yield
at 0.429 percent. The 30-year U.S. Treasury bond <US30YT=RR>
shot up 1-10/32, with the yield at 4.237 percent.
(Reporting and writing by Manuela Badawy; Additional
reporting by Leah Schnurr, Richard Leong and Wanfeng Zhou in
New York, and Mike Peacock, Alex Lawler and Jan Harvey in
London; Editing by Jan Paschal)
