LONDON, Oct 22 (Reuters) - Commodity prices tumbled across the board on Wednesday, with copper falling to a three-year low as worries about demand deepened due to the global economic slowdown.
Stock markets around the globe lost ground as investors dumped riskier assets despite government attempts to restore confidence and rescue battered financial systems.
"It is obviously the next stage. Financial crisis and then the real economy," Michael Lewis, head of global commodities at Deutsche Bank, said. "People are trying to assess the depth of the downturn."
Gold prices sank more than 2 percent to their lowest in almost five weeks as the dollar jumped to a two-year high against the euro [nLM731884]. The oil price fell below $70 a barrel, nearing $68.57, its lowest since June 2007.
U.S. crude for December delivery CLc1 was down $2.76 at $69.42 a barrel by 1119 GMT, recovering from an earlier trough of $68.90 a barrel. London Brent crude LCOc1 was down $2.31 at $67.41.
"Concerns over weakening oil demand have dampened the oil price, even though the OPEC meeting is expected to lower production targets," David Moore, commodities strategist at the Commonwealth Bank of Australia, said in a note to clients.
The Organization of Petroleum Exporting Countries called an emergency meeting for this Friday, when the producer group is widely expected to agree to cut supply to defend prices.
NOT IMMUNE
Gold, traditionally seen as a safer asset in times of trouble, was not immune to the sell-off. Spot gold was at $751.70/753.70 against the last quote of $770.10 an ounce in New York late on Tuesday.
"We are currently in what is normally a seasonal demand high with the Indian wedding season and approaching Christmas/New Year," John Meyer, head of resources at Fairfax, said.
"However, price volatility and high prices of past months has depressed physical demand the jewellery markets."
Copper, a major gauge of the real economy, plummeted to its lowest in almost three years, as emerging countries, particularly China, proved to be slowing down with the rest of the world.
London Metal Exchange copper MCU3 for delivery in three months dropped to $4,270 a tonne, its weakest since December 2005 and was last at $4,315 versus $4,500 at Tuesday's close.
In Shanghai, copper SCFc3 plunged by its 5 percent limit to 36,070 yuan ($5,278) a tonne, a three-year low.
Mining company BHP Billiton (BHP.AX: Quote, Profile, Research)(BLT.L: Quote, Profile, Research) warned Chinese demand was set to weaken, although it showed little sign of trimming production.
"China has not been immune to the global slowdown," the world's biggest mining house said. "We expect volatility and uncertainty to continue in the short term." [ID:nSYD398426]
Copper prices have fallen by more than 50 percent since a record high in July, and nickel prices are down 80 percent since their all-time peak in May 2007.
U.S. grains fell, with Chicago Board of Trade soybean futures for November delivery SX8 down 1.9 percent at $8.90-½ a bushel, while December corn CZ8 sank 3.8 percent.
Coffee and sugar futures dropped on investor selling and cocoa tracked the weaker trend.
