GLOBAL MARKETS-Stocks bounce, gold steadies

Updates throughout

By Tom Westbrook and Amanda Cooper

SINGAPORE/LONDON, Feb 3 (Reuters) - Global stocks rose on Tuesday after a three-day decline, as investors took heart from gold recovering some poise following a two-day rout, and from a long-awaited trade deal between the United States and India.

The Australian dollar was the strongest performer in the currency market, rallying broadly after the central bank joined Japan as the only developed-world economy to raise interest rates.

Investor sentiment more broadly picked up, as evidenced by a steep drop in volatility and a robust recovery in assets that had previously taken a beating along with gold, including silver and copper.

Indian domestic markets rallied after U.S. President Donald Trump announced that tariffs on Indian goods would be cut to 18% from 50% in return for New Delhi halting Russian oil purchases and lowering trade barriers.

The MSCI All-World index .MIWD00000PUS was up 0.6% on the day, following three days of declines, while Europe's STOXX 600 .STOXX rose for a third day, up 0.6% at record highs, echoing a strong performance in Asian markets, where Japan's Nikkei .N225 jumped 4% and South Korea's KOSPI .KS11 rose 5%.

S&P 500 futures ESc1 were up 0.2% with traders eyeing a busy few sessions of earnings.

With so many positions stopped out by collapses in crowded silver and gold bets, investors were taking stock and sitting back, according to Steven Leung, director of institutional sales at brokerage UOB Kay Hian in Hong Kong.

"It will take a long time for them to rebuild a bull or bear position... so they are staying away from the market," he said.

METALS STABILISE

Gold XAU= was up 5.3%, set for its biggest one-day rise since 2008, at $4,912 an ounce, marking a gain of around 13% from Monday's lows. Silver XAG= shot up by 9% to $86 an ounce.

Commodities stocks and the dollar all whipsawed since Trump's nomination of Kevin Warsh to lead the Federal Reserve sent metal prices tumbling. Warsh is keen to shrink the Fed's balance sheet, which would push up bond yields, a negative for precious metals that have no yield of their own.

Jefferies strategist Mohit Kumar said the sell-off on Friday and Monday was more a matter of a paring of overcrowded positions in gold and silver than down to any real change in the fundamentals for those markets. As a result, the sharp drop in prices was contained and had only a fleeting impact on the broader market.

"We remain constructive on risky assets and would use any sell-offs to buy. We still remain in the diversification camp, both geographically and within sectors. We favour a broadening of the rally and have been shifting away from the 'just AI' theme," he said.

Sticking with AI, chipmaker AMD AMD.O and server equipment company Super Micro Computer SMCI.O were due to report after the market close. In industry news, Reuters reported that ChatGPT developer OpenAI has been seeking faster alternatives to Nvidia's artificial intelligence chips.

TAKAICHI TRADE

The dollar took a step back after last week's rally against a range of currencies, most notably against the Aussie dollar, which gained as much as 1.5% after the Reserve Bank of Australia raised rates by a quarter point to 3.85%, citing above-target inflation and a tight labour market.

Markets had mostly anticipated the increase, though are now rushing to price in a follow-up in May.

The euro EUR= rose 0.1% to $1.1803, below late January's peak above $1.20.

The yen JPY= traded at 155.71 per dollar, having retraced about half the gains it made on the U.S. currency that followed talk of possible joint U.S.-Japan intervention to boost the yen.

Polls show Japanese Prime Minister Sanae Takaichi's Liberal Democratic Party heading for a landslide victory at the weekend's election - putting pressure on bonds and the yen as it would hand a mandate to her agenda for fiscal loosening.

Japanese Finance Minister Satsuki Katayama on Tuesday was downplaying weekend remarks from Takaichi highlighting benefits of a weak yen, at odds with authorities' efforts to support it.

(Additional reporting by Tom Westbrook; Editing by Shri Navaratnam and Susan Fenton)

((tom.westbrook@tr.com; +65 6973 8284;))