COMMODITIES-Markets skid on risk-aversion; US oil at 3-month low

* Risk flight over French recession fears, Spain borrowings
* Dollar rises to one-week high vs euro, pressuring commods
* US crude closes down 2.2 pct, Brent falls for 6th day
* Copper, gold hit six-week lows

By Barani Krishnan
NEW YORK, Oct 23 (Reuters) - U.S. oil prices closed down
after hitting three-month lows and copper and gold tumbled as
well on Tuesday as investors fled from risky assets due to
worries about a global economic slowdown and a spike in Spain's
borrowing costs.
The dollar rose to a one-week high against the euro as
business morale in France's manufacturing hit two-year lows,
fueling fears that the euro zone's second-largest economy may be
on the brink of a recession. A stronger dollar makes commodities
priced in the currency, such as oil and metals, less affordable
to users of the euro.
Arabica coffee hit a two-week trough. Corn and wheat also
skidded, as the selloff extended to agricultural markets.

The Thomson Reuters-Jefferies CRB index, a global
benchmark for commodities, settled down 1.2 percent, near a
2-1/2-month low. Natural gas was the only commodity
among the 19 tracked by the CRB to show gains, closing 2.4
percent higher on technical buying.
"This is a straight risk-off day. Everything's getting
sold," said Spencer Patton, founder and chief investment officer
of Steel Vine Investment in Chicago.
"You have a number of individuals who are probably having to
sell positions in order to raise margins, to either meet margin
calls or avoid them. It's just a situation where the outside
markets are absolutely overwhelming any other stories that are
going on in the commodity markets."

WEAK US COMPANY OUTLOOKS HURT OIL
Oil was weighed down by slowing global economic growth,
Europe's ongoing debt crisis and weak outlooks from U.S.
companies reporting earnings.
Chemical company DuPont cuts its earnings forecast
and announced 1,500 job cuts in its third-quarter earnings
report that missed Wall Street expectations, helping push
commodities and U.S. equity markets lower.

DuPont's gloomy outlook came a day after heavy machinery
maker Caterpillar Inc warned the economy was slowing
faster than expected.
Spain's borrowing costs rose after ratings agency Moody's
downgraded five of the country's regions.
U.S. crude settled at $86.67 a barrel, down 2.2
percent and near lows last reached on July 13.
London's benchmark Brent crude finished at $108.25,
down 1 percent.

COPPER, GOLD HIT SIX-WEEK LOWS
Copper slid to a six-week low on Tuesday, giving up more
gains from its September rally.
Three-month copper on the London Metal Exchange
ended at $7,831 a tonne, down from $7,953 at the close on
Monday. Earlier it dropped to an intraday low of $7,807.75, its
weakest point since Sept. 7.
Aluminum, lead, zinc, tin and nickel also hit their lowest
levels in more than a month.
"Exogenous factors are still in control and the market is
still waiting for some direction from China or elsewhere,"
analyst Leon Westgate at Standard Bank in London said.
"But I'm not sure there's any reason for China to be very
enthusiastic about switching the (stimulus) taps back on. I
would expect more concrete plans to emerge next year, rather
than this year, particularly as the data hasn't been that bad."
Gold fell 1 percent, tumbling below its 50-day moving
average. Market watchers said demand for gold as an inflation
hedge was drying up, after the Federal Reserve's latest program
of purchasing mortgage-backed debt had given gold its latest
boost. Bullion remains up 9 percent for the year to date.
"It feels like deflation is now back in, and the
quantitative easing is not going to help out the economy," said
Phillip Streible, a senior commodities broker at futures
brokerage R.J. O'Brien. In the first two rounds of quantitative
easing, the Fed had purchsed government debt. Its third round,
announced in August, focused on mortgage debt.
The Fed is due to issue its latest policy statement on
Wednesday. Most economists expect the U.S. central bank to
refrain from any additional easing ahead of the Nov. 6
presidential election.
By 4:10 p.m. EDT (2010 GMT) , the spot price of gold
hovered around $1,708 an ounce, down 1.3 percent.
Prices at 4:15 p.m. EDT (2014 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 86.49 -2.16 -2.4% -12.5%
Brent crude 108.06 -1.38 -1.3% 0.6%
Natural gas 3.535 0.083 2.4% 18.3%

US gold 1709.40 -16.90 -1.0% 9.1%
Gold 1706.80 -21.49 -1.2% 9.1%
US Copper 356.95 -5.25 -1.4% 3.9%
LME Copper 7831.00 -122.00 -1.5% 3.0%
Dollar 79.925 0.273 0.3% -0.3%

US corn 756.00 -5.25 -0.7% 16.9%
US soybeans 1553.25 6.75 0.4% 29.6%
US wheat 868.75 -9.50 -1.1% 33.1%

US Coffee 160.85 -3.65 -2.2% -29.5%
US Cocoa 2498.00 -18.00 -0.7% 18.4%
US Sugar 19.65 -0.41 -2.0% -15.4%

US silver 31.793 -0.459 -1.4% 13.9%
US platinum 1575.60 -36.60 -2.3% 12.2%
US palladium 593.85 -28.80 -4.6% -9.5%