GLOBAL MARKETS-Oil, gold touch new highs on safety investing

(Recasts with U.S. markets, adds byline; dateline previous LONDON)

By Herbert Lash

NEW YORK, March 3 (Reuters) - Oil and gold charged to new highs on Monday as investors sought safety from a crumbling dollar and soft equity markets as weak U.S. economic data and inflation worries keep money flowing to commodities.

Crude oil prices set new records in New York and London, and gold edged closer to $1,000 an ounce, setting a record high for the fourth straight day.

Treasury bond prices extended losses and the dollar pared losses against the euro and the yen after a slightly firmer-than-expected U.S. manufacturing report.

European shares closed down for a fourth day and U.S. stocks traded little changed after midday as data did little to dispel concern over the potential for a U.S. recession.

"From an oil perspective, this rally like that across the commodity sector remains rampant as fund investors and speculators continue to seek safer havens from an ailing equity market," said Robert Laughlin, an analyst at broker MF Global.

Crude speculators on the New York Mercantile Exchange have increased their net long positions to the highest in seven weeks, according to data from the Commodity Futures Trading Commission released last week.

U.S. pared early losses as a new high in oil prices prompted investors to snatch up shares in the energy sector. Financial shares weakened as mortgage banker Thornburg (TMA.N: Quote, Profile, Research) said it is suffering cash shortages and some speculated it may need a bankruptcy action. Thornburg's woes reminded investors of the continuing fallout from a global credit crunch.