Precious Metals Gold was flat until the New York open on Thursday, then fell precipitously until mid-morning, after which it leveled off and traded sideways for the remainder of the day, finishing at $834.50, down $33.70. Overnight, gold has edged higher. Platinum came well off its overseas lows in the first two New York hours, but then it too sagged without relief, ending just off its intraday low at $970/oz., down $63. Overnight, platinum has slipped lower. Silver got walloped from the New York open all the way through the Globex, in a nearly continuous down line, failing to hold even $11 and closing at $10.85/oz., down a whopping $1.74. Overnight, silver is trending higher. (Click here for charts) It was a bloodletting that stretched across every market except the currency trade, where the dollar prolonged its determined climb against the euro. Nothing was spared, as equities were hit almost as hard as commodities. Fear of everything seems to be spreading, as investors retreat into cash en masse. The cash-to-equities ratio vs. the S&P yesterday rose to 31%, eclipsing even its high point during the last recession, when it hit 30% as the tech bubble burst. Gold at the moment is certainly being sledgehammered by the dollar’s strength and oil’s weakness, but its safe haven status hasn’t really kicked in yet, and may not for a while if the bailout passes on its next try in the House. Additionally, there is the problem of liquidity. As the paper markets continue to tank, cash-strapped investors will have to raise money to cover their losses, and the first option to which they turn has traditionally been selling metal. How much of that is going on now can’t be measured, but it’s bound to be considerable. Looking short term, Senate passage of the proposal “has forced gold lower,” said Peter Grant, of USAGOLD-Centennial Precious Metals. But, “The long-term implications of the proposal, if it is passed, are extremely negative for the dollar and therefore extremely positive for gold.” For now, though, “Speculation about the bailout is the main … driving force,” said Ed Bugos, editor of Gold & Options Trader. “Every time the market thinks it will go through, gold falls, and vice versa when the market thinks it will not be passed.”