Gold Bullion prices hit $1720 per ounce in Wednesday's Asian trade – their highest level in over a month – before easing back to around $1700 by lunchtime in London.
Silver Bullion also gained, climbing to $33.95 – 13.3% above where it started the month.
Yesterday afternoon saw Gold Bullion leap 3.1% in less than three hours following news that European finance ministers had cancelled a meeting scheduled today – though the EU leaders summit is expected to go ahead as planned.
"The rally...marks the first time in several weeks that gold has traded inversely to equities," says one Gold Bullion trader here in London, citing the 2% fall in the S&P 500 index.
Stock markets on Wednesday morning were fairly flat, as were commodities. Longer-dated US and German government bonds sold off, while UK Gilts gained.
Eurozone officials resumed discussions in Brussels on Wednesday – ahead of a summit scheduled for this evening at which leaders will hope to agree a deal to tackle the ongoing debt crisis. A meeting of Eurozone finance ministers had also been scheduled for today, but was cancelled on Tuesday afternoon.
Talks are expected to focus on three main areas: recapitalization of Europe's banks, the amount by which Greek government debt should be written down, and how to use the European Financial Stability Facility to prevent contagion spreading further.
Leaders agree banks need around €110 billion of additional capital to withstand future shocks, according to press reports.
It is uncertain, however, how big a loss holders of Greek government bonds will be asked to take. Greece's finance minister is reported to have told his country's banks that the figure will be around 50%.
Leaders are expected to discuss two options for the EFSF. One involves insuring a portion of any losses on newly issued sovereign debt, while the other would see EFSF funds used to set up a triple-A rated special purpose vehicle – which would issue its own bonds and use the proceeds to buy the debt issued by at-risk sovereigns.
Europe's leaders are "saying a lot of the right things," reckons US Treasury secretary Timothy Geithner.
"They're clearly working on it and they're moving with a greater sense of urgency. That's all welcome, but until we see what they come together with, it's a little hard to evaluate."
"The numbers are not yet finalized," one European Union official told newswire Reuters on Tuesday.
"The leaders will agree on the options...but whether it will be an agreement with all details remains to be seen. I think it will be challenging...it will be very difficult to agree on everything."
"Buck up," says Barry Eichengreen, professor of economics at the University of California at Berkeley.
"This crisis is going to be with us still for a while...I fear they're not going to take the kind of steps to resolve it."
In Italy meantime the government was "at risk" last night, according Umberto Bossi, leader of junior coalition partners the Northern League.
Italy's government was told by EU leaders to draw up fresh austerity measures ahead of today's summit, but proposed pension changes have reportedly led to disagreement within the country's ruling coalition.
"If we touch pensions the people will kill us," said Bossi.
Prime minister Silvio Berlusconi was reported to have reached a compromise Wednesday morning – though it remains to be seen whether this will be deemed sufficient by his fellow Eurozone leaders at today's summit.
Italy is the Eurozone's third-largest economy, and its biggest borrower – with a debt-to-GDP ratio of 120%.
French banks meantime have the highest exposure to Italian debt in the European banking system – holding nearly $400 billion in Italian government and private debt instruments at the end of last year, more than twice that held by German banks, according to data from the Bank for International Settlements.
Elsewhere in Rome, Mario Draghi – who takes over as ECB president at the start of next month – says "the Eurosystem [of European central banks] is determined, with its non-conventional measures, to prevent malfunctioning in the money and financial markets creating an obstacle to monetary transmission."
Draghi's comments are a coded implication that the ECB will continue to buy government debt issued by Italy and other troubled sovereigns, according to Reuters.
Here in the UK meantime, plans have been approved for Scotland's first gold mine. Scotgold Resources expects its Gold Mining operation in Loch Lomond National Park will eventually produce 0.6 tonnes of Gold Bullion per year – and around 2.4 tonnes of Silver Bullion.
Total world Gold Mining production last year was an estimated 2698 tonnes, according to data published by the World Gold Council.
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