Oil, gold, copper dive on demand fears

By Anna Stablum

LONDON (Reuters) - Everything from copper and oil to gold and coffee were battered by sharp selling on Friday as commodity markets continued to be swept up in the global financial crisis.

Copper prices are down around 24 percent so far this week, gold headed for its biggest monthly percentage decline since 1983 and oil hit a 17-month low as demand fears intensified.

"The recession will be a global one and it will be pretty nasty," said Sean Corrigan, chief investment strategist at Diapason Commodities Management.

"We now have financial and real economic problems interacting and making each other worse and in that situation people need a bit of convincing that commodities are going to see much of physical demand in the near future," Corrigan said.

Gold fell to $699.40 an ounce by 1:15 p.m., down from $722.50 late in New York on Thursday.

In early trade it touched a fresh 13-month low of $680.80.

"Gold is following the dollar and oil," Wolfgang Wrzesniok-Rossbach, head of sales at precious metals trading house Heraeus, said. "The physical demand we are seeing is not enough to stem the tide here."

Gold has slipped some 20 percent from a month ago, pressured by a recovery in the dollar and a sharp slide in oil prices.