Gold was in positive territory into the first hour of New York trading on Monday, but then fell off a cliff, dropping almost $30 through the rest of the Comex, before rallying on the Globex to finish at $921.50/oz., down $16.90. Overnight, gold has dropped off.

Platinum peaked in Hong Kong, then dropped steadily until mid-morning, before it turned around and clawed back by about $20 to end at $1059/oz., down $11. Overnight, platinum has slipped lower.

Silver climbed from Hong Kong to mid-morning, peaking near $13.40, but then it too completely hit the skids, falling sharply by about 60 cents before a late mini-rally took it back to close at $12.94/oz., down 39 cents. Overnight, silver is trending lower. (Click here for charts)

The precious metals failed to get any kind of boost as the new week began, and were unable to build on the gains of late last week.

Among the usual suspects, rising oil prices might have been expected to buoy gold, but there was no support to be had from that quarter in the face of a dollar rally that seems incapable of being choked off.

Weakness in equities may be partly to blame. “Given the likely need for cash due to equity market volatility it is likely that gold will run into further pockets of long liquidation in the coming sessions,” wrote James Moore, of TheBullionDesk.com.

At the same time, though, Moore said that, “Given the continued weakness of equities, investors may again look towards safe-haven asset types, particularly gold,” and he called for the metal to set a new high above $1,030 during the first half of the year.

Also factoring in, says Dan Norcini, writing on jsmineset.com: “There still appears to me to be a fair amount of long crude/short gold spreading taking place. The thinking behind that play is that the worst of the economic carnage is over, commodity markets look to be perhaps bottoming, stocks are showing insufficient selling pressure to break into new lows and that therefore gold and other safe havens are no longer needed (hence the weakness in the bonds). You then buy crude oil on the expected economy recovery and get rid of gold.”

And those who consider Dennis Gartman, editor of the Gartman Letter, to be a contrarian indicator are likely to heed that he wrote, “It seems reasonably wise to reduce our gold holdings once again on this recent strength … Unless there is a sudden upward shift in gold holdings by the ETFs, weak demand for jewelry will weigh upon the gold price.”

Source: Gold, Silver Plummet

Last 5 posts by Doug Casey

• Resource Stock Roundup:Monday, July 27, 2009 - July 27th, 2009
• Base Metals Higher - July 27th, 2009
• Crude Continues to Climb - July 27th, 2009
• Dollar Moves Lower - July 27th, 2009
• Gold Pushes Through $950 - July 27th, 2009