* Sharp drop in US consumer confidence hits most markets * Oil down almost 3 pct, backing off from near $80 level * Copper down first time in a week * Gold closes at 3-month low as dollar a bigger safe haven * Coming up: US June durable goods data, on Wednesday By Barani Krishnan NEW YORK, July 27 (Reuters) - A bigger-than-expected drop in U.S. consumer confidence brought the commodities rally to a pause on Tuesday as investors turned to the safety of the dollar while reassessing the appetite for risk. Crude oil lost nearly 3 percent, backing away from the near $80 per barrel high seen since July 21. Copper fell for the first time in seven sessions after accumulating as much as 10 percent over the past week. Even gold, which usually finds favor in times of political and financial trouble, tumbled 2 percent, settling at a three-month low, as investors saw the dollar as a greater safe-haven. Analysts pointed to declining gold bullion holdings in SPDR Gold Trust -- the world's largest exchange-traded gold fund -- as further evidence of investors retreating from the precious metal. "I don't think gold is going to do as well as it did when all the worries were there in terms of what Greece was going to do, what Spain was going to do," said Walter de Wet, analyst at London's Standard Bank. "It is unlikely it will see the massive ETF rises we did in May." For Wednesday's session, investors are likely to take their cue from data for U.S. durable goods orders in June, analysts said. The Reuters-Jefferies CRB index, a global commodities benchmark, briefly saw its biggest percentage loss in a month. The 19-commodity index was down 1 percent by 1:35 p.m. EDT (1735 GMT). The last time the index fell as much was on June 29. (Graphic: http://link.reuters.com/kyv37m) The euro fell against the dollar, backing off an 11-week high as a drop in U.S. consumer confidence to its lowest level since February prompted investors to shy away from riskier assets. A stronger dollar makes commodities priced in the greenback costlier for users of the euro. U.S. crude's front-month contract fell as much as 2.8 percent, or $2.19, to touch a session low of $76.79 barrel. In copper, London's benchmark three-month contract closed at 7,059 a tonne, versus Monday's settlement of $7,148 a tonne, when it touched a 10-week high. The session low was $7,016 a tonne. New York's most-actively traded copper futures' contract, September, settled down half percent, or 1.65 cents. at $3.2065 a lb. The session low was $3.1760. In gold, New York's August futures settled down 2.1 percent, or $25.10, at $1,158 an ounce -- the market's lowest close since May 4. (Editing by Marguerita Choy)

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