MARKETS-COMMODITIES * Key commodities slide as growth worries take hold * Copper hits one week low, gold tops $1,220 an ounce * Further corrective move likely to make prices attractive By Veronica Brown LONDON, June 1 (Reuters) - Basic resources began June in bearish mood after a dismal May, dented by prospects of lower demand in Europe and even in giant commodity user China, but traders sensed prices moving towards attractive levels. Benchmark base metal copper hit a one week low, while oil headed towards $70 a barrel. ICE raw sugar, the worst performer to date in 2010, also extended its fall. Tuesday's falls come after the Reuters Jeffries commodity index posted its biggest monthly percentage loss since the aftermath of Lehman Brothers collapse in 2008. The basis of the slide across some key resources, also reflected in falling equities and a weakened euro, lay in expectations for slower growth in the euro area and China, and how that might impact on global economic recovery. But with significant corrections on several commodities already so far this year and a sense overall that global growth forecasts were still more or less intact, some investors were looking for decent levels to add positions. "I wouldn't worry too much about this year's growth rate globally. The OECD report last week was talking about reasonably, almost bullish forecasts," said Ashok Shah, chief investment officer at fund London and Capital. "We're still going to be growing, but instead of growing at 4-4.5 percent it might be 3 percent," he added. On oil, he said falls seen so far were not a cause for concern. "We always knew that the trading range was something like $65-85. We're now in the second half of that range and soon I think it will be very attractive to take positions once you are below $70," he said. U.S. crude for July delivery stood at $72.19 a barrel, down 2.45 percent, after dropping to a low of $71.64. Oil fell by around 14 percent in May, its sharpest drop since late 2008 when the market was crashing from the record high of nearly $150 touched in July that year. Analysts have said a 19-month peak hit at the start of May of $87.15 was overdone, but equally a brief dip below $65 was exaggerated and levels below $70 were a buying opportunity. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graphic showing price performances for commodities in 2010, click on: http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GOLD NEARS RECORD, COPPER SLIDES Risk-wary sentiment has been stoked in Europe and China. The European Central Bank warned on Monday that euro zone banks faced up to 195 billion euros ($239 billion) in a "second wave" of potential loan losses over the next 18 months due to the financial crisis. China's factories scaled back production last month and slowed the pace of hiring, the purchasing managers' index (PMI) for May showed on Tuesday. Copper for three months delivery on the London Metal Exchange fell 3 percent to $6,720 a tonne, after falling as low as $6,678, its lowest since May 25 and versus $6,939 a tonne on Friday. Gold, a beneficiary of fear elsewhere in markets, rose to $1,223.90 an ounce, its highest in two weeks, and was last quoted at $1,223.55, within $30 of May's record peak. "The main driver for gold is going to be what is going to happen with regards to Europe and all its debt issues," said Standard Bank analyst Walter de Wet. Investment demand for gold held steady, with holdings of the world's largest gold exchange-traded fund, New York's SPDR Gold Trust, still at a record 1,267.93 on Monday. "Financial investments in gold as seen through the popularity of ETFs reached a new peak (in May) with total known holdings in gold ETFs rising by 8.3 percent or 5 million ounces to 63.8 million ounces," said Saxo Bank senior manager Ole Hansen in a note.

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