*

U.S. stocks regain some ground lost Friday, European

stocks

higher

*

Gold at fresh record highs

*

Investors grasp for hope for compromise in US-China trade

war

*

U.S. bond market closed for holiday

(Updates to 1445 GMT)

By Sinéad Carew and Dhara Ranasinghe

NEW YORK/ LONDON, Oct 13 (Reuters) - MSCI's global

equities gauge regained some ground on Monday after Friday's

steep sell-off as U.S. President Donald Trump softened his tone

on the U.S.-China trade war, but safe-haven gold hit fresh

record highs in a sign that uncertainty remained high.

On Friday Trump had threatened 100% tariffs on China from

November 1 in response to China's curbs on exports of rare earth

elements. During the weekend, Beijing defended its move as a

response to U.S. aggression, but stopped short of imposing new

levies on U.S. products. So by Sunday, the U.S.

President sounded more conciliatory posting on social media that

the U.S. did not want to "hurt" China.

"Friday was a big sell off and today it's a big rally. The

Friday sell off was all about Trump threatening 100% tariffs on

China. Today Trump is backing away from that," said Tim

Ghriskey, senior portfolio strategist at Ingalls & Snyder in

New York. "It was a fear trade on Friday and an elation trade

today."

On Wall Street at 10:45 a.m. (1445 GMT) the Dow Jones Industrial

Average rose 480.23 points, or 1.06%, to 45,960.52, the

S&P 500 rose 86.35 points, or 1.31%, to 6,638.49 and the

Nasdaq Composite rose 397.43 points, or 1.78%, to

22,599.34.

MSCI's gauge of stocks across the globe

rose 7.15 points, or 0.74%, to 979.40.

Ghriskey noted that there were still some signs of skepticism in

the market as equity indexes have not erased all of Friday's

losses and investors were still buying gold.

"Gold is the fear trade. Even with Trump backing away from

the 100% tariffs on China there is fear out there and gold is

traditionally the place to hide," he said. Also, BofA

commodities analysts said in a note on Monday that they had

raised their forecast for gold to $5,000 an ounce for next year

from $4,400.

Spot gold rose 2% to $4,097.57 an ounce. U.S. gold

futures rose 2.89% to $4,090.80 an ounce.

The pan-European STOXX 600 index

rose 0.33% although France remained in the spotlight with

reappointed prime minister Sebastien Lecornu facing pressure to

get a budget deal across the line.

In currencies, the dollar index , which measures the greenback against a basket of

currencies including the yen and the euro,

rose 0.26%

to

99.31.

The euro was

down 0.47%

at $

1.1563 while a

gainst the Japanese yen , the dollar

strengthened 0.85%

to

152.43

.

Japanese markets have had their own problems with the ascension

of new LDP leader Sanae Takaichi to prime minister now in doubt,

contributing to a sharp rebound in the yen and a 5% dive in

Nikkei futures on Friday. Japan's Nikkei was closed on

Monday for a holiday.

For Monday's Columbus Day/Indigenous Peoples' Day holiday, U.S.

bond markets are closed.

Oil prices rose on Monday after hitting five-month lows on

Friday, as investors focused on potential talks between the US

and Chinese presidents that could ease a trade war between the

world's two largest economies.

U.S. crude

rose 1.77% to

$

59.92

a barrel and Brent

rose to

$

63.71

per barrel,

up 1.56%

on the day.

In the week ahead, investors will be monitoring the earnings

season kick-off with major U.S. banks reporting, including

JPMorgan ( JPM ), Goldman Sachs ( GS ), Wells Fargo ( WFC ) and

Citigroup ( C/PN ).

S&P 500 companies overall are expected to have increased

earnings by 8.8% in the third quarter from a year earlier,

according to LSEG IBES, and strong results will be needed to

justify the market's high valuations.