GLOBAL MARKETS-US dollar hits 3-year low, gold on hot streak

                                
 * US dollar index hits 3-yr trough, approaches record low
                                
 * Gold jumps to record high, silver at 31-year peak
                                
 * Strong U.S., European corporate earnings boost equities
                                
 * Disappointing U.S. data support Treasury debt prices
 (Updates market action, adds new quotes)
                                
 By Richard Leong
                                
 NEW YORK, April 21 (Reuters) - The U.S. dollar tumbled to a
three-year low against major currencies on Thursday and gold
prices surged to a new high as investors flocked to investments
that are less reliant on the U.S. economy.
                                
 The erosion of 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.
                                
 The dollar has already been bogged down by the Federal
Reserve's near-zero interest rate policy and overseas central
banks' ongoing diversification from the U.S. currency, despite
the festering fiscal problem in Europe.
                                
 "All these factors are just dollar negative," said Jessica
Hoversen, currency and bond analyst at MF Global in New York.
"Barring something happens in Europe, the dollar will probably
continue to turn lower."
                                
 Upbeat U.S. and European corporate earnings propelled world
stocks to a 33-month high. Although the U.S. economy is showing
signs of slowing again due to weak job growth and rising oil
prices, many U.S. companies have a huge chunk of business
outside the country.
                                
 "Stocks are not backed by the credibility of the dollar and
so many U.S. companies are multi-national," Hoversen said.
                                
 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 U.S. central bank will keep interest rates
at near zero for the foreseeable future, even as other major
central banks raise rates or are about to tighten, have
pressured the dollar in recent weeks.
                                
 The dollar index <.DXY> was down by 0.3 percent to 74.147
after falling to 73.735, its lowest level since August 2008.
Light holiday trading volume magnified foreign central banks'
gradual reduction of the U.S. dollar from their reserves.
                                
 Technical charts suggested the index could move towards a
record low of 70.698 hit in 2008. [FRX]
                                
 U.S. financial markets will be closed Friday for Easter,
while British markets will be closed Friday and Monday.
                                
 STOCKS, GOLD ADVANCE
                                
 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. [GOL/]
                                
 "People want hard assets and that's what people are
comfortable with," MLV's Billhardt said.
                                
 Along with precious metals, investors snapped up stocks.
                                
 The MSCI All-Country World Index <.MIWD00000PUS> rose for a
third straight day. It was up 0.7 percent, touching a high of
350.82, a level last seen in July 2008.
                                
 Asian shares climbed to their highest since January 2008.
The MSCI Asia ex-Japan index <.MIAPJ0000PUS> gained 1.3
percent, while Japan's Nikkei <.N225> closed up 0.8 percent.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended up 0.4 percent, while Wall Street stocks <.DJI> <.SPX>
<.IXIC> were 0.4 percent higher. [US/]
                                
 Oil prices rebounded from earlier losses linked to weak
data on U.S. jobs and regional manufacturing. U.S. June crude
futures <CLc1> were up 77 cents at $112.22 a barrel. [O/R]
                                
 Thursday's U.S. economic reports supported the Treasury
bond market by reinforcing expectations that the Fed, which
holds a policy meeting next week, will pledge to keep interest
rates low well.
                                
 Benchmark 10-year Treasury notes <US10YT=RR> were up 4/32
in price to yield 3.39 percent, down 0.01 percentage point from
late on Wednesday. [US/]
                                
 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 2.31
percent, down 0.03 percentage point from late Wednesday.
 (Additional reporting by Wanfeng Zhou, Karen Brettell, Frank
Tang and Robert Gibbons, Editing by Chizu Nomiyama)