Gold stayed above $1480 per ounce in Asian and European trading, and then experienced a sudden spike $15 upwards to new record prices yet again at the beginning of the New York trading session. Prices take support from worries over euro zone debt and inflation in Asia after China opted to raise reserve requirements again.

Spot gold rose as high as $1,495 for a short time in a massive spike, and was bid at $1,490.40 an ounce at 1323 GMT, against $1,483.75 late in New York on Friday.

The euro fell against the dollar on Monday and bonds issued by the euro zone's lower-rated sovereigns weakened on increased talk of a possible Greek debt restructuring and uncertainty over Portugal's bailout.

A consequently stronger dollar reined in gains in dollar-priced gold, which became more expensive for other currency holders, but concerns over the outlook for the euro zone are in themselves gold-supportive.

The strong showing of an anti-euro party in a Finnish election on Sunday has heightened the risk of a fresh obstacle to European Union plans to bail out Portugal and fortify the euro, analysts said.

The ongoing European periphery issues aren't attracting as strong a reaction from the market as they did originally, but clearly Spain is the next concern, and that is feeding into (gold), said RBS analyst Daniel Major.

(There was) another increase in the Chinese reserve requirement ratio over the weekend, he added. It certainly looks as though there are signs that inflation is uncomfortably high within the Asia region. Gold has a role as a perceived inflation hedge.

China raised banks' required reserves on Sunday for the fourth time this year, extending the fight against stubbornly high inflation.

European shares also fell as nervousness ahead of key quarterly earnings results and lingering worries about indebted euro zone countries lowered investors' risk appetite. .EU


Meanwhile, oil prices slid on fears that high prices were hurting demand, after main oil exporter Saudi Arabia said the market was over-supplied, when announcing a cut in output.

Crude oil remains near multi-year highs, however, supported by unrest in the Middle East and North Africa. Elevated oil prices tend to support gold, which is often seen as a hedge against oil-led inflation.

Gold prices are more sensitive to commodity price movements than to broader inflation, said HSBC analyst James Steel in a note. The recent gains in inflation across the OECD and emerging world are in those categories -- food and fuel -- that gold is most likely to react positively to. Among other precious metals, silver was bid at $42.83 an ounce against $42.99, having earlier touched a new 31-year high at $43.35 an ounce. Silver has been the best-performing precious metal so far this year, up 39 percent since January.

However, analysts say the metal, which has benefited from strong investment flows and perceptions that recovering industrial demand will put a floor in prices, may be overpriced at current levels.

When we were visiting U.S. clients at the beginning of March, the bullish mood toward silver was very evident, said UBS in a note. Now, caution and confusion abound.