By Pham-Duy Nguyen Oct. 15 (Bloomberg) -- Gold was little changed on speculation that a global slowdown will reduce demand for precious metals and other raw materials. Silver declined. U.S. equities slumped for a second straight day, hammered by the biggest drop in retail sales in three years and growing doubt that plans to bail out banks will prevent a prolonged recession. UBS AG said gold probably will peak in 2008 after seven annual gains and average $825 an ounce in 2009. The metal climbed to a record in March. ``The problem that gold seems to be suffering from is fewer-than-normal players,'' UBS metals strategist John Reade said in a report. ``Comex traders seem almost sidelined as leveraged investors hoard cash. Jewelry demand is very slow. Safe-haven buying has slowed.'' Gold futures for December delivery fell 50 cents to $839 an ounce on the Comex division of the New York Mercantile Exchange. The metal dropped 7.4 percent in the previous four sessions. The record was $1,033.90 on March 17. Total gold trading on the Comex yesterday was 97,369, compared with 126,405 a week earlier. Silver futures for December delivery fell 88 cents, or 8 percent, to $10.18 an ounce. The price has fallen 32 percent this year. Gold may rebound should turmoil in credit and equity markets persist, reviving demand for the metal as a haven. The Standard & Poor's 500 Index tumbled as much as 7.3 percent today after surging 12 percent on Oct. 13. The historical volatility of the S&P 500, or the rate at which a price moves up and down, is 90 percent in the past 10 days. `Band-Aid Rally' ``The reality is that the equities rally this week was a Band-Aid rally, and now you're seeing some buying coming back to gold on the wall of worry,'' said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. ``The underlying problem in the credit markets is going to take a long time to work through.'' Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, reached a record 770.6 metric tons on Oct. 10. It fell to 767.6 tons yesterday. Gold may fare better than other assets as wide price swings in equities and other markets discourage investors, McGhee said. ``You've had relative strength in gold,'' McGhee said. ``It's going to be very volatile, very thin trading, very slippery. But if you look, gold is the strongest asset on the board.'' Gold is little changed this year, while the S&P Index is down 36 percent and the Reuters/Jefferies CRB Index of 19 raw materials has dropped 21 percent. U.S. 10-year Treasuries have returned 3 percent. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

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