* U.S. debt impasse rattles global markets
* World stocks fall, gold hits record high
* Dollar tumbles versus Swiss franc (Updates prices, adds comment, details, changes byline, dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, July 25 (Reuters) - Major global stock markets and the U.S. dollar fell on Monday as a political impasse in Washington over raising the U.S. debt ceiling stoked fears of a U.S. rating downgrade and even debt default.
Investors poured into perceived safe-haven assets, driving gold to a record high and the Swiss franc to an all-time peak against the U.S. currency.
U.S. government bonds, however, failed to benefit from their usual safe-haven status after the weekend breakdown in talks fueled investor anxiety over Treasury holdings. Selling was particularly intense in longer-dated maturities.
The United States moved one step closer to losing its coveted triple-A credit rating as a sharply divided U.S. Congress pursued rival budget plans on Monday, neither of which appeared likely to win broad support. If the impasse were to continue, the government will run out of money to pay its bills in nine days unless lawmakers increase the $14.3 trillion borrowing limit.
"If politicians don't find a solution right now, we are facing a disaster of major proportions," said Fidelio Tata, head of U.S. rates strategy at SG Corporate & Investment Banking in New York.
Wall Street stocks opened sharply lower. The Dow Jones industrial average <.DJI> was down 86.73 points, or 0.68 percent, at 12,594.43. The Standard & Poor's 500 Index <.SPX> was down 8.30 points, or 0.62 percent, at 1,336.72. The Nasdaq Composite Index <.IXIC> was down 16.52 points, or 0.58 percent, at 2,842.31.
A U.S. debt default would have massive repercussions for financial instruments, in part because U.S. Treasuries are the benchmark against which the performances of many other assets are judged.
"The markets were hopeful that by now something would have been agreed. I don't think a U.S. debt default has been completely ruled out by the markets," said Keith Bowman, equity analyst at Hargreaves Lansdown.
Even if politicians raise the borrowing limit in time, the threat of a downgrade remains. Standard & Poor's has said it might still cut the United States to AA if lawmakers embrace a short-term fix that lifts the debt ceiling but doesn't address long-term fiscal issues.
World stocks as measured MSCI's all-country world stock index <.MIWD00000PUS> was last down 0.6 percent. Emerging markets <.MSCIEF> also lost 0.6 percent.
The FTSEurofirst 300 <.FTEU3> was down 0.2 percent. Japan's Nikkei <.N225> earlier closed 0.8 percent lower. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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GOLD, SWISS FRANC
The Swiss franc was the biggest beneficiary of the demand for safe havens. The dollar
Against a basket of currencies <.DXY>, the dollar slipped 0.1 percent. The dollar
"The U.S. will have to come up with a credible long-term plan in order to avert a downgrade," said Manuel Oliveri, currency strategist at UBS in Zurich.
"The increasing risk of a downgrade means declining confidence in U.S. assets and the risk of capital outflows, which is a negative for the dollar against the Swiss franc and the yen," he added.
Gold surged to a record high above $1,620 an ounce the fifth record high for bullion in less than two weeks.
Spot gold
Oil prices fell as worries about a U.S. downgrade or even default dampened hope for stronger global economic growth and drove investors away from risky assets.
Brent
In the U.S. Treasury market, the 30-year Treasury bond was last down 1-5/32 in price for a yield of 4.32 percent
Benchmark 10-year notes