GLOBAL MARKETS-Dollar, pound fall on stimulus hope, gold surges

                                
 * U.S. dollar, pound fall on stimulus speculation
                                
 * Gold touches record high on flight-to-safety bid
                                
 * Stocks wallow as weak U.S. data points to Fed move
 (Updates with markets moves)
                                
 By Manuela Badawy
                                
 NEW YORK, Sept 28 (Reuters) - The U.S. dollar and the
British pound fell against the euro on Tuesday as those
countries' central banks were seen likely to provide more
support to their economies, which sent gold to record highs.
                                
  The euro surged to a five-month high against the greenback
and to a four-month high against the pound on speculation the
Federal Reserve and the Bank of England were likely to pump
more money into their anemic economies.
                                
  Gold futures rose to $1,310 an ounce and silver edged back
near a 30-year high as a weaker-than-forecast U.S. consumer
confidence reading boosted the precious metals' safe-haven
appeal.
                                
 European stocks fell while U.S. shares were modestly higher
after the September consumer confidence data and a report that
U.S. home prices dipped in July.
                                
 The Fed is likely preparing a fresh round of quantitative
easing measures to announce at the end of its Nov. 2-3 meeting,
hedge fund adviser Medley Global Advisors said in a report on
Tuesday, a market source told Reuters. [ID:nN28263335].
                                
 The Fed is also weighing a more open-ended, smaller-scale
bond buying program, the Wall Street Journal reported.
                                
 The Bank of England's Adam Posen became the first of the
central bank's policymakers since November to urge pumping more
money into the economy in order to prevent a repeat of the kind
of slump Japan experienced in the 1990s. For details, see
[ID:nLAC005768].
                                
 "The growing realisation that ultra loose monetary policies
may debase currencies is leading to continuing safe-haven
demand for gold. Gold is the only currency that cannot be
debased and its value is not dependent on the performance of
politicians and central bankers," analysts at GoldCore said in
a note.
                                
 The weak U.S. dollar and low bond yields reflect falling
investor confidence in the strength of the recovery, analysts
said.
                                
 Gold for December delivery <GCZO> was trading at $1,309.90
an ounce after hitting an all time high. Silver <XAG=> edged
near a three-decade high on the spot market after the U.S.
data.
                                
 The Conference Board's index of consumer attitudes fell to
48.5 in September from a revised 53.2 in August, pressured by a
weak labor market and business conditions. [ID:nN28171795]
                                
 U.S. home prices also dipped in July, hovering above
multi-year lows according a Standard & Poor's/Case-Shiller home
price report. [ID:nN28171424]
                                
 "With unemployment at a 26 year high, confidence among
consumers remains weak, and this decline in sentiment will give
the Fed a stronger reason to increase stimulus in November,"
said Kathy Lien, director of currency research at GFT in New
York.
                                
 On Wall Street, the Dow Jones industrial average <.DJI> was
up 28.95 points, or 0.27 percent, at 10,840.99. The Standard &
Poor's 500 Index  <.SPX> was up 1.95 points, or 0.17 percent,
at 1,144.11. The Nasdaq Composite Index  <.IXIC> was up 0.30
points, or 0.01 percent, at 2,370.07.
                                
 MSCI world equity index <.MIWD00000PUS> rose 0.19 percent
and the Thomson Reuters global stock index <.TRXFLDGLPU> gained
0.24 percent.
                                
 The FTSEurofirst 300 index <.FTEU3> closed 0.3 percent
lower as investors shed riskier assets, while emerging stocks
<.MSCIEF> eased 0.03 percent.
                                
 The euro <EUR=> was up 0.99 percent at $1.3587 from a
previous session close of $1.3454. Against sterling, the euro
rose to around 85.98 pence from around 84.92 pence <EURGBP=D4>.
                                
 Sterling <GBP=> was down 0.2 percent at $1.5795 dollars as
investors bet that a resumption of the BoE's 200 billion pounds
quantitative easing program was more likely.
                                
 Against the Japanese yen, the dollar <JPY=> was down 0.63
percent at 83.73 from a previous session close of 84.260.
                                
 The prices of U.S. Treasury debt rose as the latest data
showing another drop in home prices and weaker consumer
confidence added to expectations for more Federal Reserve
support, pushing yields lower and extending Monday's rally.
                                
 The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
14/32, with the yield at 2.4814 percent.
 (Additional reporting by Maytaal Angel and Atul Prakash in
London; Editing by Kenneth Barry)