GLOBAL MARKETS-Gold soars past $2,000, gold up on stimulus hopes

* U.S. gold futures hit record $2,023.09/oz
* S&P 500, Dow grind higher on stimulus focus
* Recovery doubts push Treasury yields lower
* Stimulus hopes, falling COVID rates lift oil
* Dollar retreats on stimulus talks

By Herbert Lash
NEW YORK, Aug 4 (Reuters) - Gold surged past the $2,000 mark
on Tuesday after Democrats and the White House appeared closer
to agreement on new stimulus to help the coronavirus-hit economy
while stocks on Wall Street traded mixed as investors awaited
more aid from Washington.
Oil prices also rose on the prospect of more stimulus but
Treasury yields fell to their lowest since March on safe-haven
demand and concerns about the ultimate cost of aid.
Markets have lost confidence that Congress will approve
enough stimulus to provide adequate benefits, leading the
Federal Reserve to boost its balance sheet, said Lee Ferridge,
head of North America macro strategy for State Street Global
Markets.
"It all falls back on the Fed, that is what's driving this,"
Ferridge said. "Gold is outperforming, Treasuries are
outperforming. It's all about the debasement of the dollar."
Gold prices breached the psychological $2,000 level for the
first time, propelled by hopes Washington will approve more
stimulus to combat the economic toll of the still spreading
pandemic.
The U.S. Senate's top Democrat said a new round of
coronavirus relief was moving in the right direction, though the
two sides remain far apart. Spot gold prices XAU= rose 1.42% to $2,004.81 an ounce,
after bids earlier hit highs of $2,009.134 an ounce.
Bullion has soared more than 30% so far this year, supported
by lower interest rates and safe-haven buying on concerns Fed
policy and government stimulus are debasing the dollar.
The bond market, which is at loggerheads with equity markets
over stimulus and its role in the economy, is skeptical about
the prospects of a rebound in economic growth in the third
quarter.
"There is a concern about how much the stimulus package will
help the economy, and its cost over time," said Kevin Giddis,
chief fixed income strategist at Raymond James.
The 10-year U.S. Treasury notes US10YT=RR slid 4.8 basis
points to yield 0.5151% after earlier trading as low as 0.51%.
MSCI's benchmark for global equity markets .MIWD00000PUS
rose 0.47% after earlier hitting a five-month high, less than 4%
from its all-time peak in February. The index was lifted
overnight when stocks rallied in Asia on relatively strong
manufacturing data from around the world reported on Monday.
On Wall Street, the Dow Jones Industrial Average .DJI rose
0.31%, the S&P 500 .SPX gained 0.04% and the Nasdaq Composite
.IXIC dropped 0.13%.
Wall Street shrugged off new upbeat data after a report
showed new orders for U.S.-made goods increased more than
expected in June, suggesting the manufacturing sector was
beginning to claw its way out of the pandemic's deep pit.
The Commerce Department said factory orders rose 6.2%,
boosted by a surge in demand for motor vehicles. Despite the
second straight monthly gain, orders remained well below their
level in February before lockdowns sapped demand.
Shares in Europe slid. The broad pan-regional FTSEurofirst
300 index .FTEU3 closed down 0.10% at 1,412.42 after a strong
rally on manufacturing data on Monday.
Disappointing results from Diageo Plc DGE.L , the world's
largest spirits maker, and German drugs and pesticides group
Bayer BAYGn.DE , took the shine off growth-linked cyclical
stocks. BP BP.L cut its dividend for the first time in a decade
after a record $6.7 billion second-quarter loss, when the
pandemic hammered fuel demand. Its shares rose 6.5% after BP
unveiled a plan to reduce its oil and gas output by 40% and
boost investments in renewable energy. Oil prices edged higher, with Brent on track for a
five-month high, on hopes for more stimulus and signs America
may be making progress on controlling the coronavirus spread.
Brent crude futures LCOc1 rose 28 cents to settle at
$44.43 a barrel. U.S. crude futures CLc1 gain 69 cents to
settle at $41.70 a barrel.
U.S. gold futures GCv1 hit a record of $2,023.09 an ounce
and settled 1.7% higher at $2,021.

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