Gold Bullion prices touched new 1-week highs in late Asian trade on Wednesday, slipping back as European stock markets rose and Portugal's new issue of 10-year debt found what bond dealers called strong demand.

The Gold Price in Dollars retreated below $1380 from $1387.50 per ounce.

Silver Bullion traded in wholesale 1,000-ounce bars slipped 1.4% from its own 1-week high at $29.89 per ounce.

The physical market remains tight, said an Asian dealer on Wednesday morning, three weeks ahead of the Chinese New Year, with premiums for wholesale Gold Bars - over and above London prices - holding near this week's two-year highs at $3 per ounce in Hong Kong.

Over in mainland China, contract prices at the Shanghai Gold Exchange (SGE) ended Wednesday's session unchanged at the equivalent of $45 per gram - some 1.8% above London benchmark quotes and equal to a premium of more than $23 per ounce.

The factory worker who assembled your iPhone is buying gifts for his family in Shenzhen before going back home to Hunan, writes another Hong Kong Gold Bullion dealer.

He just booked a train ticket for 28th Jan.

Talking to people in the Chinese market over the weekend, writes Jeff Toshima, Tokyo director of the World Gold Council, in today's Nikkei Money, I was amazed to discover the number of gold saving accounts at Industrial and Commercial Bank of China has grown above 1,000,000 within a year of ICBC launching the service.

Here in Japan, it has taken over 10 years for the gold-savings account industry as a whole to reach 700,000 accounts. It is impressive that only one Chinese bank can exceed that level so easily, within one year, without PR or active marketing in-branch.

Meantime in Chinatown, New York on Tuesday, the Bank of China became the first US bank branch to offer Chinese Yuan-denominated accounts.

Account holders may exchange no more than $20,000-worth of Renminbi per year at the state-owned Chinese bank.

China will have to move significantly further in opening its financial markets, enhancing their liquidity, and strengthening rule of law before its currency comes into widespread international use, writes economic historian Barry Eichengreen in a blog for the Oxford University Press.

As the world's No.1 reserve currency - and thanks to the Eurozone debt crisis - the US Dollar is therefore here to stay...if only for want of an alternative, Professor Eichengreen says.

But the one thing that could jeopardize the Dollar's dominance would be significant economic mismanagement in the United States.

Short-term meantime, Precious metals have come under increasing pressure and we have thus neutralized our views, says Commerzbank technical chart-watcher Axel Rudolph in his weekly client analysis.

The Gold Price last week slid through its July-to-January uptrend line at $1391 and the 55-day moving average at $1379.85.

Friday's [six-week] low at $1352.70 is key for the short-term outlook, says Rudolph.

Back in Europe on Wednesday morning, good bidding for Portgual's €1.25 billion in new bonds drove the 10-year yield down below the 7% level which it acknowledged this week would make the country's debts unsustainable.

The focus now switches to the Italian and Spanish auctions on Thursday, says Société Générale strategist Ciaran O'Hagan.

The Euro currency briefly rose through $1.30 to the Dollar on the news, capping Gold Prices for German, French and Italian buyers below Tuesday's 1-week high of €34,400 per kilo.

But despite reasserting its link with daily swings in the Euro/Dollar exchange rate this week, the price of Gold Bullion has more than tripled since the single currency first rose through the $1.30 level in Nov. 2004.

Tomorrow both the European Central Bank and the UK's Bank of England will announce their monetary policy for the coming month. Neither is expected to raise rate from their current all-time historic lows.

Gaining 34% in 2010, the Gold Price in Sterling today slipped £4 per ounce to £884 - some £35 below last week's new record peak.

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