* Gold hits new record high
* World stocks flat, Europe weak
* Wall Street set to open higher
* Dollar slightly stronger
By Jeremy Gaunt, European Investment Correspondent
LONDON, Oct 7 (Reuters) - Gold hit another record high on
Wednesday before falling back a bit as the dollar stabilised and
global stocks flat, weighed by losses Europe.
Wall Street looked set to open higher. The dollar rose
against a basket of major currencies, bucking its recent weak
trend that has helped boost gold.
Investors continued their scramble for yield, lifting the
Australian dollar to 14-month highs on the prospects for higher
interest rates after Tuesday's tightening. []
Gold <XAU=> trimmed some gains early but then rose as high
as $1,048.20 an ounce, easily eclipsing Tuesday's $1,043.45
record. It was later around $1,042.
The metal has been driven higher in part by concerns that
the dollar is losing favour, including potentially as the
currency for settling oil trades. []
Despite the headline figure, however, gold remains far below
its inflation-adjust record from the 1980s.
Investor Jim Rogers, one of the biggest bulls during this
decade's commodities rally, said he would stay clear of buying
gold for now, although he predicted prices will continue to go
up over the long term. []
"Gold has hit a new high and I don't like to buy something
at record prices unless there are extremely strong fundamental
reasons," he said.
World equities as measured by MSCI, in the meantime, were
little changed. <.MIWD00000PUS>
The pan-European FTSEurofirst 300 <> index was down
0.3 percent. The index gained more than 2 percent on Tuesday.
Earlier on Wednesday, Japan's Nikkei average <> closed
1.1 percent higher.
DOLLAR FIRMS
The dollar was slightly stronger against a basket of major
currencies <.DXY> although higher-yielding currencies such as
the Australian dollar <AUD=D4> remained in favour.
"With the view that the low interest rate policy in the U.S.
will likely be around for a while, an abundant supply of dollars
is flowing into higher-yielding currencies such as the
Australian dollar and emerging market currencies," said Kazuyuki
Kato, treasury department manager at Mizuho Trust & Banking.
The greenback came under pressure on Tuesday after a report
of forex diversification by oil-producing countries. Some of the
countries later denied such a move.
The euro was at $1.4704 <EUR=>, barely changed on the day.
Yields on euro zone government bonds were slightly lower
with the 10-year yield at 3.152 percent <EU10YT=RR>.
(Editing by Toby Chopra)
