Depending on demand, gold backing could be 25% to 50% of the total value of an Italian bond, for example.

If yes, this could cause another wave of selling Italian bonds, putting more pressure on yields.

There was little good news - although an auction of Italian bonds did go pretty well.

This has led investors to view Italian bonds more and more as a risky asset.

Yield on Italian 10-year bonds over the past seven sessions.

The three-year Italian bond drew bids worth 1.22 times the amount on offer.

The successful auctions saw yields on benchmark 10-year Italian bonds fall 22 basis points to 6.67pc.

Italian bonds are now trading above 6 percent - rates considered "catastrophic" by the bond market.

Such a decision could cool a recent boom in Italian bonds.

The yield on Italian 10-year bonds rose to 6.8pc - dangerously close to the 7pc bail-out level.