LONDON (Reuters) - Oil hit a year low and industrial metals plunged up to 10 percent on Friday on fears financial turmoil would hit demand but gold rose in a flight to safety.
With equities plummeting, led by the Nikkei's biggest one-day percentage loss since the 1987 stock market crash, investors scrambled out of commodities as concern grew that efforts to unlock battered credit markets were not working.
"In the midst of the bloodbath in the equity markets, gold will probably be the standout winner here," said Adrian Koh, an analyst at Phillip Futures in Singapore.
"I think a lot of people will be speculating about $1,000 gold again, and I personally think it's not very far away."
Spot gold climbed to about $918.00 an ounce, up from $911.50 in New York late on Thursday. Earlier it touched a session high of $931.00, its strongest level since July 29.
"Currently it is fear that is dominating. We are seeing a flight to safety. It is only gold that shines," Peter Fertig, a consultant at Dresdner Kleinwort, said.
Oil fell more than $4 a barrel to a one-year low, depressed by expectations that global demand growth will shrink if the credit crisis pushes the world economy into recession.
U.S. light crude for November delivery fell $4.35 to $82.24 a barrel.
The Organization of Petroleum Exporting Countries has called an emergency meeting in Vienna on November 18 to discuss the impact of the global financial crisis on the oil market.
"OPEC appears to be scrambling to put in another, firmer floor at $80," said Jonathan Kornafel, Asia director of U.S. based options trader Hudson Capital Energy.
"The market may still overshoot on the downside regardless of what OPEC does, as financial flows continue to pour out of commodities," he added.
LOOMING RECESSION
Base metals also fell sharply on mounting fears of a looming recession.
"There's probably more downside (to come) -- we've yet to see the downturn really being priced into these markets," said Michael Lewis, global head of commodities research at Deutsche Bank.
"Obviously industrial metals and energy are the most exposed," he added.
Copper for delivery in three months on the London Metal Exchange fell about 9 percent to $4,890. The price of the metal used in power and construction has fallen about 45 percent from a record high of $8,940 set in July.
Aluminium was down about 3 percent, hitting $2,190 a tonne, its lowest since December 2005. The metal used in transport and packaging has come under pressure in recent weeks on news of deteriorating car sales data from auto makers.
"It's a very, very sombre picture," Stephen Briggs, commodity strategist at RBS global Banking & Markets. "There is only one game in town -- economic meltdown."
The agricultural sector was not spared.
U.S. grain and soybean futures fell by more than 4 percent, sweeping away gains made earlier in the week on harvest worries.
"Funds need to extract cash and they're taking it from whereever they can -- equities are the main thing but they're liquidating anything," said Garry Booth, a trader at MF Global Australia Ltd.
Chicago Board of Trade corn for December delivery fell 24-3/4 cents or more than 5 percent to $4.13-1/2 a bushel, wheat for December delivery lost 23 cents to $5.81-3/4 and soybeans for November delivery tumbled 46 cents to $9.34.
Sugar, cocoa and coffee prices also fell sharply, tracking the broad-based decline in other commodity markets.
March raw sugar futures on ICE fell 0.45 cents or 3.8 percent to 11.45 cents a lb after slipping to 11.40 cents, the lowest level for the front month since late June.
