RTRS:COMMODITIES-Gold hits fresh record high, oil falls on economy fears
* Gold surges above $1,661 an ounce for the first time
* U.S. crude falls to near five-week low
* Chicago corn rises to 8-week high; wheat, soy fall
By Randy Fabi
SINGAPORE, Aug 3 (Reuters) - Gold climbed to a record high for the second straight day and oil fell on Wednesday as concerns over the fragile U.S. economy and a widening euro debt crisis drove investors away from riskier assets.
Completion of a last-gasp deal to avoid a U.S. default failed to bring any relief, as markets focused instead on how Washington's efforts to cut spending could slow growth at a time when global industrial activity was already sluggish.
The size of the U.S. debt remained a concern for ratings agency Moody's. Moody's retained its triple-A rating for the United States but assigned it a negative outlook, underscoring the threat of a future downgrade that would drive up the cost of borrowing.
"The deficit is still a big problem and that is creating financial fear," said Ken Hasegawa, a commodities derivatives manager at Japan's Newedge brokerage.
"Even if the debt ceiling issue in the United States has been cleared, that is only successful in that it avoids a default."
Spot gold rose to an all-time high of $1,661.14, hitting its ninth record in 16 trading sessions and up nearly 17 percent so far this year as investors flocked to the safe haven.
"The momentum in gold in the short term will continue to run strong, supported by worries about global economic growth, gold purchases by South Korea's central bank announced yesterday and rises in SPDR Gold Trust holdings," said Li Ning, an analyst at Shanghai CIFCO Futures.
OIL DEMAND FEARS
Crude fell to a near five-week low on growing worries that major economies may slip back into recession and cause a downturn in oil demand.
U.S. crude CLc1 fell 45 cents to $93.34 a barrel by 0550 GMT, after slipping to $93.08 on Tuesday, the lowest intraday price since June 29. Brent LCOc1 slid 57 cents to $115.89, about $11 below this year's peak above $127.
U.S. consumer spending fell in June for the first time in nearly two years and incomes barely rose, signs that the economy lacked momentum as the second quarter drew to a close, data on Tuesday showed.
That followed Monday's weak manufacturing data from the United States, Europe and China and last week's disappointing second-quarter U.S. GDP estimate.
In Europe, Italy found itself dragged deeper into the euro zone debt crisis, prompting emergency consultations in Rome and among European capitals. Italian bond yields hit their highest in the euro's 11-year lifetime on Tuesday.
In agricultural markets, Chicago corn climbed to an 8-week high after rising by its daily limit in the last session on concerns hot weather could curb U.S. crop yields. Wheat slipped from a two-week top and soybeans fell 0.2 percent.
Heat stress on U.S. corn and soybean crops will continue this week but relief for crops is expected by the weekend, said agricultural meteorologist John Dee of Global Weather Monitoring.
Among metals, copper fell 0.04 percent to $9,676 a tonne as investors shrugged off the U.S. debt deal and focused on Europe's worsening debt crisis. (Additional reporting by Rujun Shen and Alejandro Barbajosa; Editing by Clarence Fernandez)
