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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 1210 GMT)

By Tom Westbrook and Alun John

SINGAPORE/LONDON, May 20 (Reuters) - Gold and copper

started the week at record highs, with world stocks not far off,

buoyed by investor optimism over 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 a shift by central banks into bullion was one

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

savings from stocks into commodities.

Hints of a safe haven bid for gold, after a helicopter crash

killed Iran's president, could also be in the mix, though it

failed to show up in other asset classes. For copper, traders

pointed to speculation and short covering as well as an expected

pick-up in demand for commodities from China after it announced

"historic" steps on Friday to stabilise its property sector.

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%, S&P 500 futures were up a touch too.

"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 and last at 4.418%.

BIG IN JAPAN

Speculation has grown that Japanese rates will rise above

zero, driving government bond yields 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 but were last down 0.2% 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 Middle East 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.