The Gold Price in Euros whipped within 1.5% of last month's all-time record highs in London trade on Monday, as weaker-economy Eurozone bonds fell sharply on a raft of bail-out rumors and leaks.

Both gold and Silver Prices meantime reversed an earlier rally against the Dollar, while stock markets fell together with broad commodity prices.

Over in Asia, Tokyo was closed for a national holiday, but what one dealer called strong interest in physical Gold Bullion drove premiums per ounce above London prices to $3.50 in Hong Kong.

With the Chinese New Year starting in 3 weeks' time, Shipments are heading to Asia, as there's good demand here, said another.

Supply is a little tight on the physical market, a third Hong Kong dealer is quoted by Reuters.

In Mumbai, India, The good response [to falling Gold Prices ] has been continuing from last week, says a state-run bank's bullion dealer to the newswire.

I am expecting good sales to continue today, says another, with Feb. bringing the post-harvest wedding season to the world's No.1 gold consumer market.

China today reported a fresh monthly record for national exports in Dec., while the Communist government of Laos said it's set to follow Cambodia and Vietnam by launching a public stock exchange on Tuesday.

Back in Europe today, German chancellor Angela Merkel's office was forced to deny claims in Der Spiegel that she is pressing Portugal to join Greece and Ireland in accepting a joint IMF-EU rescue.

Already holding an entire year of Portugal's debt issuance, bond-buying by the European Central Bank meantime nudged Lisbon's debt prices higher, easing yields back down towards the 7% level which - Gary Jenkins at Evolution Securities notes - triggered last May and Dec.'s bail-outs.

It seems reasonable to suppose that events will move rapidly this week as the authorities work to put together a credible support mechanism, reckons Simon Derrick at Bank of New York Mellon.

Following last week's launch of joint stabilization mechanism bonds by the European Council, I don't believe Europe is ready for [joint Eurozone bonds]. It's not the solution for the weaker countries, says Andrus Ansip, prime minister of new Euro-currency member Estonia in an interview.

This idea is advancing, counters Italian finance minister Giulio Tremonti, quoted by French business paper Les Echos.

Between them, Eurozone states are set to ask the bond market for a total of €24 billion this week.

Belgian bonds fell hard Monday morning, after Belgium's King Albert II asked the caretaker government to propose a 2011 budget.

Spanish debt also fell, driving the yield offered by 10-year debt to 5.56%.

The inability [of the Dollar Gold Price ] to revisit the last major high at $1430 is a concern, says the latest technical analysis from bullion bank Scotia Mocatta. But it is interesting to note that gold has experienced a similar cycle high at the start of each of the past two months.

Nov. and Dec. then saw the Gold Price rebound from 7% and 5% falls respectively to rise above $1420 per ounce again.

Friday's low of $1355.50 per ounce in the physical Spot Gold was 4.7% below last Monday's high.

In the Gold Futures and options market, meantime, latest data released by US regulator the Commodity Futures Trading Commission after Friday's close showed the net long position held by speculative, non-industry players fell last week to its lowest level since August, down 1.5% to the equivalent of 699 tonnes of Gold Bullion.

Within that number, institutional traders (aka Large Speculators) slashed the gap between their bullish and bearish bets by more than 5%. Private individuals, in contrast, raised their net long position in Comex Gold Futures and options by over 3.5%.

US Gold Coin buyers slashed their new investing in Dec., data from the US Mint show, but 2010 still saw full-year sales of American Gold Eagles rise for the 10th year running, up some 30% from 2009.

On Monday, just fewer than half the Gold Bullion products listed by leading German online retailer Pro Aurum were marked unavailable.

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