Global spot gold prices have rallied to near record levels as the European debt crisis centred on Italy and Spain intensifies and investors seek safer, risk-free, havens.
Gold, which hit a record $US1575 ($NZ1920) on May 2, was yesterday trading just $5 below that level, having appreciated about 6% during the past fortnight.
While euro zone finance ministers were pushed into action only when the markets gave them no choice, Italy's government sped up approval of its austerity plan.
The European Union opened the door for a complete overhaul of the region's bailout fund, which has so far focused on handing out rescue loans to countries on the brink of collapse in return for high interest rates and painful austerity measures.
Forsyth Barr broker, Peter Young, said European stocks ended lower, hitting a four-month low on Tuesday trading, saying the lack of political consensus to tackle the region's debt crisis had kept investors on edge.
Mr Young said trading on European bourses was heavy, with volumes on France's CAC 40, Spain's IBEX and Italy's FTMIB nearly twice their 90-day daily average.
The European markets nose-dived on worries that the euro zone's third and fourth biggest economies; Italy and Spain, are both too expensive to save with Europe's rescue funds - may become the crisis' next victims.
Mr Young said the euro zone's blue chip Euro STOXX 50 Index fell to a near one-year low, Italy's FTMIB Index hit a two-year low, before bouncing back, while Greece's ATG Index tumbled to a 14-year low.
The financial markets hammered European assets after euro zone finance ministers opened the door to a possible Greek default and failed to prevent contagion spreading to Italy and Spain.
Craigs Investment partners broker Peter McIntyre said US stock finished down for their third consecutive day, in part because international rating agency Moody's had further downgraded Ireland's credit rating, which "added to the fear of spreading contagion", he said.
"[Investor] fears over the spread of the sovereign debt crisis continued to drive selling, although a relatively successful Italian debt auction helped put a floor under losses," Mr McIntyre said.
