By Pham-Duy Nguyen Oct. 14 (Bloomberg) -- Gold fell for the fourth straight session after the U.S. agreed to spend $250 billion to rescue ailing banks. Silver climbed. Stocks in Europe and Asia rose for a second day after Treasury Secretary Henry Paulson announced plans to buy stakes in financial firms to ease the lending crisis. Gold fell 1.9 percent yesterday as the Standard & Poor's 500 Index soared 12 percent. ``The equity markets have come back, so you'll see some of the capital that was flowing into gold just a week ago go to equities,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. Gold futures for December delivery dropped $3, or 0.4 percent, to $839.50 an ounce on the Comex division of the New York Mercantile Exchange. The price declined $64 in the previous three sessions. Gold rose to a record $1,033.90 on March 17, partly because the Federal Reserve slashed U.S. borrowing costs, weakening the dollar and driving commodities to all-time highs. The Reuters/Jefferies CRB Index of 19 raw materials rose as much as 2.2 percent today. The gauge still has dropped 37 percent from the record in July. Since the collapse of Lehman Brothers Holdings Inc. on Sept. 15, which helped trigger passage of a $700 billion bailout plan by the U.S., gold has traded as low as $767.40 to as high as $936.30. `Flight to Safety' ``Gold is trading in the lower part of its range,'' Lesh said. ``There's still a certain amount of capital that's going to gold as a flight to safety. But gold does not have the favor of commodity basket buyers anymore.'' Still, gold is a storehouse of value and may fare better than other assets in times of financial turmoil, analysts said. ``Gold may come under short-term selling pressure as money managers, whose portfolios are suffering in other markets, dump positions to raise cash,'' said Stuart Flerlage, a director of business development at NuWave Investment Corp. in New York. ``We are still long-term bullish on gold. Gold will be a strong hedge for inflation and against fiat currency devaluation.'' Gold may rebound on demand for a hedge against market tumult, analysts said. The S&P 500 gained as much as 4.1 percent today and dropped as much as 2.3 percent. The gauge was down 1.7 percent at 2:27 p.m. New York time. The historical volatility of the S&P 500, or the rate at which a price moves up and down, is 87 percent in the past 10 days. `Volatile Period' ``It's going to take time for the bailout to go through the economy,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. ``It's a volatile period for all markets. You're not going to see a persistent decline in gold because gold is a store of value. Gold is going to be supported because of the uncertainty that's out there.'' Investors are paying as much as a 40 percent premium for gold coins, McNeill said. ``You have real people buying the coins and the hedge funds and speculators on the Comex,'' McNeill said. ``The people that are buying the coins are hard-money people, and you're not going to find them running in and out of the market.'' Silver, which has wider industrial applications than gold, rose as copper rallied for a second day. Silver futures for December delivery rose 27 cents, or 2.5 percent, to $11.06 an ounce. The price has dropped 26 percent this year, while gold gained 0.2 percent. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

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