(Adds comments, updates prices and indexes)
* Gold hits record high above $1,120, then retreats
* Stocks edge lower, U.S. dollar, Wal-Mart outlook weighs
* Dollar firmer but still near 15-month lows
By Jeremy Gaunt and Al Yoon
LONDON/NEW YORK, Nov 12 (Reuters) - Gold rose above $1,120
an ounce to a fresh record high before retreating on Thursday
and global stocks weakened, particularly in emerging markets.
Stocks were hurt as the U.S. dollar strengthened against
other currencies, largely on technical factors.
But the greenback remained close to 15-month lows, with
little sign of a solid rebound, and that helped gold.
The metal pushed to a record high because of recent dollar
weakness <XAU=>, and then declined $8.85 to $1,108.90 as the
currency recovered. A weak greenback makes metals priced in
dollars less expensive for holders of other currencies.
"We see continuous inflows from financial investors almost
on a daily basis, real interest rates are still lower and the
dollar is weakening, so the three pillars of this gold rally
are still in place," said Tobias Merath, head of commodity
research at Credit Suisse.
The dollar rose after the euro failed to break through and
hold above the psychologically important 1.50 level. The euro
declined 0.81 percent to $1.486. The dollar rose 0.68 percent
against the yen, to 90.43 yen.
Prospects that U.S. interest rates will remain at
negligible levels for some time are weighing on the currency.
On Thursday the dollar rebounded 0.61 percent against a basket
of major currencies but is still down nearly 1 percent this
month and 14.5 percent since early March.
With a light economic data calendar on Thursday, apart from
strong Australian jobs numbers that boosted the Aussie dollar
to a 15-month high, the broader market consolidated.
In the U.S., the Labor Department reported that first time
claims for unemployment insurance fell to 502,000 in the latest
week from 514,000 in the previous period. That was less than
forecast, but still supported the view of a fragile recovery.
STOCKS WEAKER
World stocks weakened, with the MSCI all-country world
index <.MIWD00000PUS> down 0.78 percent and the emerging market
component <.MSCIEF> off 1.21 percent.
The main U.S. indexes drifted lower. The Dow Jones
Industrial Average <> at midday was busting a six-session
rally as a stronger dollar hurt commodity shares. Wal-Mart
Stores Inc <WMT.N>, the world's biggest retailer, forecast
holiday profit that could miss Wall Street expectations but its
shares still managed a slight gain.
The Dow Jones average fell 58.80 points, or 0.57 percent,
to 10,232.46. The Standard & Poor's 500 Index <.SPX> declined
7.49 points, or 0.68 percent, to 1,091.02 and the Nasdaq
Composite Index .IXIC edged lower by 8.74 points to 2,158.16.
European shares dropped with the FTSEurofirst 300 <>
index off 0.1 percent to 1,014.91.
Investors globally remained fairly bullish, however, with
signs parts of the world economy are gaining traction.
The Baltic Dry Freight Index <.BADI>, which can be a proxy
for world trade patterns, rose 5.5 percent, pushed up by
freight of iron ore to China.
"A 10th straight increase for the Baltic Dry and a 15-month
high for AUD/USD (Australian/U.S. dollar) do not imply that
sentiment is about to turn over," Kenneth Brough, an economist
at Lloyds TSB, said in a research note.
Euro zone government bonds yields fell as stock weakness
boosted demand. U.S. Treasuries declined after disappointing
demand at a record $16 billion auction of 30-year bonds, which
wrapped up $81 billion of sales this week.
The yield on the benchmark 10-year Treasury note rose by
0.02 percentage point to 3.50 percent.
(Additional reporting by Jan Harvey in London and Nick
Olivari in New York; Editing by Andrew Hay)
