European stocks and the euro fell over mounting fears about the economy, as nervous investors pushed the price of 'safe-haven' gold to a record high above 1,250 dollars an ounce. London slid 0.82 percent, Frankfurt shed 0.80 percent and Paris lost 0.77 percent in midday deals following further sharp losses on Wall Street overnight. The picture was different in Asia where Tokyo closed up 0.18 percent, Hong Kong added 0.56 percent and Sydney won 1.28 percent as dealers hunted for bargains following recent losses across the region. "The mood amongst equity market investors still remains nervous despite Mr Bernanke's comments which gave a fillip to Asian markets overnight," said VTB Capital strategist Neil MacKinnon. Federal Reserve chairman Ben Bernanke had on Monday said that the US economic recovery remained on track, adding that the country should avoid falling back into the depths of recession. The comments came as US indices struck 2010 lows. On Tuesday, the price of gold hit a record 1,251.85 dollars an ounce. "Gold rallied to a new all-time high ... as worried investors continue to pile in to the precious metal," said Rajesh Patel, head trader at financial betting firm Spread Co. "We are seeing continued signs of stress in the financial markets and investors, novice to expert are looking at gold now as a hedge against further turmoil." Gold is viewed as a safe-haven investment in times of economic trouble. In foreign exchange trade on Tuesday, the euro fell to 1.1906 dollars from 1.1919 late in New York on Monday. The euro also fell against the yen, while the Japanese currency steadied versus the dollar. On Monday, the European single currency had briefly plunged to 1.1876 dollars, its lowest level for more than four years. The euro had been rattled following comments by Hungarian officials that Budapest could be in the same boat as Greece, raising the spectre that already struggling European banks could be hurt by any exposure there. The International Monetary Fund has urged European leaders to take decisive action to overhaul rules governing the eurozone and called for Brussels to be given more say over national budgets. The IMF's call came as finance ministers of all 27 European Union nations meeting in Luxembourg on Monday put the finishing touches to a 440-billion-euro fund for emergency loans to debt-laden states. Greece, Spain, Portugal, Ireland and Spain have all taken steps to rein in their budgets as well as Germany, which on Monday announced 86 billion euros in cuts by 2014. Meanwhile dealers said that a much weaker-than-expected US jobs report on Friday jolted confidence in the United States and global economic recovery after weeks of attrition driven by fears the European debt crisis could doom the euro. The United States had said that 431,000 non-farm jobs were created in May — well below the 500,000 analysts had forecast, souring sentiment. Friday's news sent the Dow plummeting 3.15 percent and lingering worries saw the index lose a further 1.16 percent on Monday.

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