Gold rallied back above $1420 per ounce Tuesday morning in London, having earlier dipped back towards where they started the week following yesterday's 2% jump amid what one Hong Kong dealer suggested was the biggest rush to buy gold in half a century.
Silver meantime climbed back above $23 an ounce by lunchtime after it too fell in early trading, though unlike gold it was down slightly on the week so far.
European stock markets ticked higher in spite of earlier losses in Asia and disappointing purchasing managers' index data, while commodities fell and US Treasuries gained.
On the currency markets the Euro fell to a two-week low against the Dollar, while Euro gold prices were trading just below €1100 an ounce by lunchtime, the level breached briefly yesterday for the first time since last week's price drop.
The world's largest gold exchange traded fund SPDR Gold Trust (ticker: GLD) continued to see net outflows Monday, with his holdings ending the day down more than 18 tonnes at 1104.7 tonnes. Since the start of 2013, the volume of gold held to back GLD shares has dropped nearly 20%.
In China by contrast, "physical gold dealers and jewelry makers have had to replenish their inventory following robust sales," according to Song Heping, assistant manager at Xiamen City Commercial Bank.
On the Shanghai Gold Exchange, the equivalent of 40.6 tonnes was traded in the benchmark 'four nines' spot contract (for gold of 99.99% purity) Tuesday, down a little from yesterday's record of 43.6 tonnes. By comparison, the previous record, set on February 18 this year immediately after the week-long Lunar New Year holiday, was 22 tonnes.
"Physical markets have responded to the much cheaper gold price levels," says UBS precious metals analyst Joni Teves.
"Our physical flows to Asia have been particularly elevated this week."
"In terms of volume, I haven't seen this gold rush for over 20 years," says Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, quoted by the Financial Times.
"Older members who have been in the business for 50 years haven't seen such a thing."
Dealers in Hong Kong Tuesday reported gold bars selling at premiums over the spot price not seen for eighteen months, citing supply constraints for physical bullion.
Growth in China's manufacturing sector meantime has slowed this month, according to the provisional HSBC purchasing managers' index published Tuesday, which also reported falls in new export orders and employment.
Over in Europe, German manufacturing PMI has fallen further below 50, the threshold between conditions seen as improving or getting worse, provisional data published this morning show, while German services PMI fell from 50.9 to 49.2.
For the Eurozone as a whole, manufacturing PMI fell from 46.8 to 46.5, provisional figures show. Eurozone government debt-to-GDP rose to 90.6% in 2012, up from 87.3% the previous year, figures published Monday show.
The policy of cutting budget deficits being implemented by many European governments, known as austerity, "is fundamentally right [but] has reached its limits in many aspects," Jose Manuel Barroso, president of the European Commission, said yesterday.
"A policy to be successful not only has to be properly designed. It has to have the minimum of political and social support."
In the UK meantime, public sector net borrowing for the fiscal year ended March fell to £120.6 billion, a drop of 0.2% from the previous year. First quarter UK GDP figures are due to be published Thursday.