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Fear, Panic, Cash and Liquidation rule the market. I would suggest the volatility in both the POG at this point in time is primarly to do with the "shadow banking system" (to coin Roubini's phrase) ie the Hedge Fund situation and also Lehman's CDS still coupled with the situation with UBS:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3211647/Fears-of-Lehmans-CDS-derivatives-haunt-markets.html
Fears of Lehman's CDS derivatives haunt markets
It is a full week after bankers gathered in New York to start sorting out the derivatives mess left by the bankruptcy of Lehman Brothers. We still do not know who is on the hook for some $360bn of default insurance, or how much they will have to pay.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3212132/Gradient-close-to-collapse-as-hedge-funds-feel-heat.html
Gradient close to collapse as hedge funds feel heat
One of London’s best known hedge funds, Gradient Capital Partners, is on the brink of collapse after dropping nearly 42pc in value last month.
http://www.telegraph.co.uk/finance/markets/3211186/Hedge-fund-squeeze-wreaks-havoc-in-equity-markets.html
Hedge fund squeeze wreaks havoc in equity markets
Prime brokers have this week hiked up the cost of trading for hedge funds.
The move has pushed some funds closer to the brink and triggered yet more havoc in global stock markets.
The bankers say that the wild swings in stock prices across the globe has radically increased their risk, forcing them to demand as much as five times more collateral from the hedge funds
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3211156/Investors-scramble-to-pull-43bn-from-US-hedge-funds.html
Investors scramble to pull $43bn from US hedge funds
Fearful investors withdrew at least $43bn (£24.9bn) from US hedge funds last month as world stock markets tanked as the global financial crisis worsened.
http://www.guardian.co.uk/business/feedarticle/7884470
There was talk among traders on Thursday that the Swiss National Bank might sell gold to help fund the troubled Swiss financial firm UBS AG.
The Swiss National Bank was the biggest seller within Europe's Central Bank Gold Agreement in the fourth year of the current pact, selling 137 tonnes of gold.
Jonathan Jossen, COMEX gold options floor trader, said that a big commodity fund was selling all commodities including gold in exchange for cash.
