* Gold posts fresh life-time high, silver at 31-year peak
* US dollar index 3-year low, charts point to record low
* Strong U.S., European corporate earnings boost equities
* Disappointing U.S. data boost Treasury debt prices
(Updates market action, adds fresh quote in paragraph 10)
By Richard Leong
NEW YORK, April 21 (Reuters) - The U.S. dollar sank to a
three-year low against major currencies on Thursday and gold
surged to a new high as investors piled into investments that
are less reliant on the U.S. economy.
The negative sentiment on the dollar accelerated this week
on signs of a slowing U.S. economy and Standard & Poor's
warning on Monday that it might take away the United States'
coveted AAA credit rating within two years if Washington fails
to achieve a plan to slash its $14 trillion debt load.
"If you look at all these big picture things, there's no
reason to buy dollars right now," said Ronald Simpson, director
of currency research at Action Economics in Tampa, Florida.
Upbeat U.S. and European corporate earnings propelled world
stocks to a 33-month high. Several U.S. bellwether stocks
jumped after strong earnings but many of those companies have
significant sales outside the United States, which is showing
signs of slowing again due to weak job growth and rising oil
prices.
Emboldened investors are now piling back into riskier
assets, though some analysts advised caution as worries about
the euro zone debt crisis and problems in the supply chain
following the Japanese earthquake stayed in the background.
Expectations the Federal Reserve will keep U.S. interest
rates at near zero for the foreseeable future, even as other
major central banks raise rates or are about to tighten, have
pressured in the dollar in recent weeks.
With little chance of the Fed raising interest rates this
year, the dollar index <.DXY> was down by 0.6 percent to 73.934
after falling to 73.735, its lowest level since August 2008.
Light holiday trading volume magnified foreign central banks'
ongoing diversification of reserves from the U.S. dollar.
Technical charts suggested the index could move towards a
record low of 70.698 hit in 2008. []
STOCKS, GOLD SHINE
The weak greenback and inflation concerns raised the appeal
of gold. Spot gold <XAU=> reached another record high at
$1,508.75 an ounce, while spot silver <XAG=> soared to a
31-year high at $46.24 an ounce. []
"People want hard assets and that's what people are
comfortable with," said Randy Billhardt, head of institutional
sales and trading MLV & Co. in New York.
The rally in precious metals was also seen in worldwide
stock markets.
The MSCI All-Country World Index <.MIWD00000PUS> rose 0.8
percent to a high of 350.70, last seen in July 2008, with Asian
shares leading the way. The MSCI Asia ex-Japan <.MIAPJ0000PUS>
jumped 1.3 percent on a surge in technology stocks.
The FTSEurofirst 300 <> index of top European shares
was up 0.5 percent, while Wall Street stocks <> <.SPX>
<> were 0.3 percent higher. []
Asian stocks rose to their highest level since January 2008
with Japan's Nikkei <> closing up 0.8 percent.
Oil prices in London turned negative after surprisingly
weak data on U.S. jobs and regional manufacturing stoked
worries over energy demand. ICE Brent June crude <LCOM1> was
down 34 cents at $123.51 after rising above $124 a barrel on
the weak dollar and a drop in U.S. stockpiles. []
Thursday's disappointing U.S. economic reports boosted
Treasury prices and reinforced expectations that the U.S.
central bank will pledge to keep interest rates low well into
2012 after its policy meeting next week.
The weaker outlook also reduced investor expectations on
U.S. inflation. The five-year breakeven rate, which is the
yield gap between five-year Treasury Inflation-Protected
Securities and regular five-year government debt, fell to 2.34
percent, more than 0.02 percentage point lower than late
Wednesday.
(Additional reporting by Wanfeng Zhou and Robert Gibbons in
New York; Emelia Sithole-Matarise and Jan Harvey in London,
Editing by Chizu Nomiyama)
