The Italian effect: Gold and U.S. dollar rise

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NEW YORK (CNNMoney) -- The euro slid to a new 30-day low on concerns that Italy might be the next victim of the European sovereign debt crisis.

The yields on Italian bonds continue to expand and the country's stock market is in a free fall. As a result, Italian market regulators requested short sellers to disclose their positions if they exceed 0.2% of a company's capital.

All equity sectors are down across the board.

The Select Sector Energy SPDR Fund (XLE), Materials Sector SPDR (XLB) and Select Sector Financial SPDR Fund (XLF) are down more than 2% for the day. Financials continue to be the worst performer as $XLF is less than 4% from its year-to-date low.

The so-called "risk off" trades are gaining popularity as the U.S. dollar index, gold, long-term Treasuries and S&P 500 VIX Short-Term Futures ETN (VXX) are moving up in tandem.

Italy: Europe's Fannie Mae moment?

Gold reached a new all-time high priced in euros. The yellow metal is up almost 5% for the past 5 trading days and it is less than 2% from its all-time high in U.S. dollars. The U.S. dollar index is at new 5-week high after advancing 2.3% over the past five trading sessions.

All these themes are hot topics of discussion on the StockTwits' stream this morning:

EddyElfenbein: Italian politicians are blaming speculators. Stop me if you've heard this one before.

firstadopter: Ironic that one of best tells on timing is when politicians (Italy PM) go to media and say "Don't worry, banks fine" Kiss... of... death.

StockSage1: Everyone seems to have "predicted" Italy this morning - a blind person could have seen it coming however timing is what matters.

firstadopter: Short-selling is so stressful when you know the authorities can ban short-selling at any moment they wish and rip your face off.

PeterLBrandt: New post. "Gold makes new all-time high priced in Euros."http://bit.ly/oFEVRY $GC_F, $EURUSD, $G6E_F, $UUP, $GLD,$IAU, $UDN, $FXE.

MercenaryJack: @ppearlman bonds up too - when $USDX, $GLD, $TLT, $VXX all rise in tandem, they're like the four horsemen of the "risk off" apocalypse.