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Gold, copper hit records; silver leaps

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JGB yields strike decade highs

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Global shares hover just below peaks

(Updates at 0910 GMT)

By Tom Westbrook and Alun John

SINGAPORE/LONDON, May 20 (Reuters) - World shares, gold

and copper started the week near record highs, buoyed by

investor optimism due to slower inflation, economic growth and

China's efforts to address its property crisis.

Gold climbed more than 1% to a record $2,449.89 an

ounce, while three-month copper on the London Metal Exchange

surged as much as 4.1% to a historic high of $11,104.50,

after climbing 28% so far this year.

That the two metals were rallying together was notable, said

analysts at Rabobank, as the two tend to "provide different

signals, with copper being reflective of the economic outlook -

owing to its importance as an industrial input - and gold being

an indicator of broader sentiment."

They suggested the shift by central banks into bullion was

one factor behind the moves, and also possibly a shift of

household savings from stocks into commodities.

Also in the mix, at least for copper, was expected demand

for commodities from China after it announced "historic" steps

on Friday to stabilise its property sector, with the central

bank facilitating 1 trillion yuan ($138 billion) in extra

funding and local governments set to buy some apartments.

Beijing on Monday left benchmark rates on hold, as expected.

BRIGHT SPOTS

MSCI's broadest index of Asia Pacific shares outside Japan

rose to its highest in two years on Monday while

the benchmark provider's world share index was

up a whisker, just shy of Thursday's all-time peak.

Blue chip indexes in France, Britain and

Germany, which also hit records last week, were all up

0.2-0.5%.

"Global economic bright spots continue to prevail," said

Vincent Chaigneau, head of research at Generali Investments,

pointing to easing inflation and rising wages supporting real

disposable income and bolstering domestic demand.

U.S. inflation slowed a touch in April, data showed last

week, causing markets to position cautiously for a September

rate cut by the Federal Reserve and driving a cross-asset rally.

British inflation data is due Wednesday and will be a

crucial factor in assessing if the Bank of England will cut

rates in June - when the European Central Bank is also set to

ease policy - or holds off till August.

Also due this week are results from chip darling Nvidia,

global business activity data, a New Zealand rate decision, and

remarks from U.S. policymakers and the minutes of their latest

meeting.

Two-year U.S. Treasury yields ended last week

four basis points (bps) lower at 4.825% and were steady on

Monday. Ten-year U.S. yields were down 8.4 bps last

week at 4.42%.

BIG IN JAPAN

Speculation has grown that Japanese rates will rise off

zero, driving government bond yields there to their highest in

more than a decade.

Ten-year yields went up 2.5 bps to 0.975%,

the highest since 2013, though the wide gap to U.S. yields left

the yen little changed at 155.67 per dollar.

The dollar logged its largest weekly drop on the euro in

two-and-a-half months last week, but was steady on Monday at

$1.08735.

Brent crude futures rose to a one-week high of

$84.25 a barrel after a helicopter crash killed Iran's president

and Saudi Arabian state news flagged a health issue for the

king, threatening fresh instability in the Middle East.

If Mideast conflict picks up, "we could see inflationary

pressures due to a potential rise in oil prices," said Tareck

Horchani, head of dealing, prime brokerage at Maybank Securities

in Singapore.

Unrest in French territory New Caledonia drove up prices for

its major export, nickel, and silver, which was chasing

gold higher, broke above $30.