Gold skids to 1-year low on stronger dollar

NEW YORK -- Gold prices tumbled to their lowest levels in a year Wednesday due to a stronger dollar, which has sharply curtailed investors' appetite for precious metals. Silver hit a two-year low.

In other commodities, crude oil fell slightly while corn, soybeans and wheat also traded lower.

The dollar has gained ground against the euro and other currencies in recent days as speculation mounts that an economic slowdown that has hampered the United States is spreading to Europe and Japan. The 15-nation euro bought $1.401 on Wednesday, down slightly from $1.4168 late Tuesday.

A stronger dollar is considered bearish for commodities, which are usually bought by investors seeking a hedge against inflation or weakness in the U.S. currency. A rising greenback also makes dollar-denominated commodities more expensive for overseas buyers.

Gold for December delivery fell $29.50 to settle at $762.50 an ounce on the New York Mercantile Exchange after earlier falling as low as $756.50 an ounce, its lowest level since Sept. 18. The contract has fallen 27 percent since surging to a record above $1,000 an ounce in March.

The stronger dollar also pounded silver prices. The December contract fell 82.5 cents to settle at $10.89 an ounce. Earlier, prices fell to $10.71, the lowest level since June 29, 2006.

Copper posted a modest gain Wednesday, virtually alone in the commodities complex. The December contract added 2.7 cents to settle at $3.114 a pound.

In energy markets, oil prices closed slightly lower as the strengthening dollar and signs of a slowing economy outweighed inventory drops and word that OPEC would cut production.

Light, sweet crude for October delivery fell 68 cents to settle at $102.58 a barrel on the Nymex. It was crude's lowest close since April 1. The contract fell by more than $3 a barrel in the previous session.

In other Nymex trading, heating oil futures fell 2.23 cents to settle at $2.9024 a gallon, while gasoline prices gained about a penny to settle at $2.6616 a gallon.

In agriculture futures, the stronger dollar weighed on most grain prices.

Wheat for December delivery fell 4.75 cents to settle at $7.2575 a bushel, while December corn shed 7.75 cents to settle at $5.3675 a bushel. November soybeans dropped 23 cents to settle at $11.78 a bushel.