GLOBAL MARKETS - Gold at new high as dollar slides, stocks gain

By Jeremy Gaunt, European Investment Correspondent

LONDON (Reuters) - Gold powered to another record high on Monday as the dollar sank, while higher commodity prices lifted world equities.

MSCI's all-country world stock index was up 0.9 percent, led by European and emerging market shares that are sensitive to commodities.

Gold hit a record high at $1,167.35 an ounce before slipping back a bit, bringing this year's gains to around 32 percent.

The main catalyst for gold's rise has been the falling dollar, which makes the metal more attractive to non-dollar investors and encourages others to hedge.

The U.S. currency was down nearly three-quarters of a percent against at basket of competitors, closing in on 15-month lows. It is being battered by expectations that the U.S. Federal Reserve will keep interest rates low for some time.

"The Fed is sounding like they mean it about keeping rates low for an extended period -- way into 2010 if not 2011," said a trader at an Australian bank.

Such a backdrop has driven large numbers of investors into gold, which also benefits from a reputation as a safe haven in times of economic uncertainty.

"You've got more high-profile hedge funds visibly investing in gold. That's yet another factor encouraging moves into gold by the wider investor community," said David Barclay, commodity strategist at Standard Chartered in Hong Kong.