Gold fell further in London dealing on Tuesday morning, extending its drop to almost 2.5% from yesterday's near-record high, as world stocks sank and commodity prices also dropped.
Government bonds rose, pushing 10-year U.S. Treasury yields down towards 3.0%.
Both Sterling and the euro fell vs. the dollar and yen, but gold priced in British pounds failed to benefit, dropping to a 5-week low of lb818 an ounce.
"Gold is testing trend-line support at $1,233," says a note from Mitsui's London dealers, "as the yellow metal has yet to see any benefit from the return to risk aversion."
"It seems that gold is not in a position to maintain these record-high prices," says Angela Prunecchi at Italian bullion dealers Italpreziosi.
Recording "another top" above $1,260 an ounce on Monday "will have important resistance implications."
Over on the stock market today, London's FTSE100 index of "blue-chip" shares fell through 5,000 - a level first reached 13 years ago on the way up - for the fifth time since September.
Crude oil meantime fell hard through $77 per barrel as an early storm warning in the Gulf of Mexico was downgraded.
Base metals also fell, and Silver extended Monday's 3.1% loss to bounce off a 3-session low of $18.46 per ounce.
"We are neutral on silver due to the seemingly random price action over the past couple of weeks," says a technical analysis from bullion bank Scotia Mocatta.
Even so, "Silver is attracting investors betting on both faster and slower economic growth," notes Bloomberg News, "as prices extend the longest run of quarterly gains in three decades.
"Doubling as a store of value for buyers concerned about the economy and as an industrial material for those bullish on growth, silver is outperforming metals from copper to zinc this year and keeping pace with gold."
Looking ahead for the U.S. economy, "The economics consensus has the blinders on as it did in the final few months of 2007," writes David Rosenberg of Gluskin Sheff, noting that the Economic Cycle Research Institute's leading indicators index has plunged from +21.2% in January to minus 6.9%.
"That's a stunning, not to mention unprecedented reversal."
New data today showed New Zealand's broad M3 money supply contracting (aka deflation) by more than 3% in May.
UK household borrowing and money holdings grew last month at their slowest annual pace on record. Bank lending to financial companies shrank by lb12 billion - also a series record.
Japanese car production meantime rose 30% year-on-year, but badly lagged Tokyo analyst forecasts of a 50% rebound.
European consumer confidence remained negative on Brussels' official survey.
"We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy," wrote RBS bank's chief credit analyst Andrew Roberts in a note to clients last week.
"Think the unthinkable," he says, warning of "monster" quantitative easing from the U.S. Federal Reserve.
"We think gold prices are most likely going to consolidate the recent gains and then extend on those gains as the year unfolds," reckons BarCap's Suki Copper, speaking to BNAmericas.
"The strength of gold investment demand is going to continue to support prices...The buyers tend to be longer-term investors who are not necessarily investing because of short-term concerns."
Over in Japan, however, "I don't expect Japanese investors to turn to gold because of a loss of confidence in their own currency, at least not as long as I live," said Osamu Ikeda, general manager at nationwide gold-dealers Tanaka Kikinzoku Kogyo, speaking at the Reuters Japan Investment Summit.
"Despite the country's huge budget deficit, Japanese people retain confidence in the country and the currency it issues."
CapGemini's latest survey of "high net worth individuals" for Merrill Lynch says that millionaires in Asia now control $9.7 trillion in investable wealth - more than their counterparts in Europe ($9.5trn) for the first time, but still lagging U.S. millionaires ($10.7trn).
Allocations to "alternative assets" (which would include gold bullion) slipped in 2009 to 6% of high-net-worth portfolios, the report says, but are expected to reach 8% during 2010.
Fixed income investments such as government and corporate bonds last year rose to 31% of millionaire portfolios, up from barely one-fifth in 2006.
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Adrian Ash runs the research desk at BullionVault. Formerly head of editorial at Fleet Street Publications - London's top publisher of financial advice for private investors - he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to a number of investment websites.