The Gold Price rose versus the US Dollar in Asian and London trade on Wednesday, recovering almost one-third of this year's 4.5% loss but again holding flat against all other major currencies.

European stock markets ticked lower, while government bonds and commodities both rose.

The German finance ministry said today it roundly rebuts claims in weekly magazine Die Zeit that Berlin wants a restructuring of Greek government debt, with bondholders forced to take losses.

In the medium term, we remain cautious on gold until it demonstrates strength against equities, which also pay dividends, said HSBC Global Asset Managements Charles Morris to Bloomberg earlier.

Between Oct. and end-Dec., Morris's Absolute Returns fund halved its 12% allocation to Gold Investment, he confirmed.

But After a lengthy absence, [other] asset managers and central bankers are readmitting gold back into the group of prudent asset classes, writes Thomas Kaplan, chairman of New York's Tigris Financial advisory and asset-management group, in today's Financial Times.

Says Kaplan, the global financial crisis has reminded portfolio managers that Gold Bullion is the only major financial asset that does not represent someone else's obligation to repay.

Over in Silver Bullion, meantime, London's wholesale market continued to suffer noticeable tightness according to one dealer, exacerbated on Wednesday morning by several reports of difficulty sourcing physical silver and short-dated borrowing.

Silver Investment demand from private investors has already led to record monthly sales at the US Mint, according to one analysis.

Users of low-cost online exchange BullionVault have raised their physical Silver Bullion holdings by 11% so far this month.

The giant iShares Silver ETF Trust fund, in contrast, has continued to shed metal, with fund managers and other investors selling 3% of their net position between New Year and last night.

Ahead of next month's Chinese New Year celebrations, Demand for silver is [also] strong in China, says Walter de Wet in Standard Bank's Commodity Daily, noting last month's $1-per-ounce premium in Shanghai over benchmark London prices.

Compounded by falling Chinese exports and rising Indian demand, however, On a relative basis, we believe silver looks overvalued not only to gold, but also relative to [other industrial] metals such as palladium and copper...which also have much tighter underlying fundamentals.

Standard Bank's analysts do not suggest shorting silver because of low global interest rates on cash savings. But we would not be surprised to see a sharp correction in the metal price - especially if the Dollar finds marginal strength.

Wednesday's declining Dollar saw the Silver Price jump to 4-session highs above $29.50 per ounce, even as it held flat against other major currncies.

Priced against the British Pound - now trading at new 8-week highs on the forex market - Gold Bullion held flat for the third session running early Wednesday at £858 per ounce.

Eurozone investors looking to Buy Gold today also saw prices hold unchanged, as the single currency rose to 2-month highs above $1.35.