NEW YORK (AP) – Gold futures tumbled sharply Tuesday as a big drop in oil prices and a stronger dollar touched off a massive commodities sell-off.

Gold for December delivery fell $24.70 settle at $810.50 an ounce on the New York Mercantile Exchange, before earlier falling as much as $40. The stronger dollar added to the selling pressure as investors were less encouraged to buy precious metals as an inflation hedge.

“At this point, there remains little in the way of motivating players not to try to retest the high $770s,” said Jon Nadler, analyst with Kitco Bullion Dealers Montreal.

Other Nymex metals also traded sharply lower. December silver shed 56.2 cents to close at $13.145 an ounce, while December copper fell 11.4 cents to settle at $3.273 a pound.

Crude shed nearly $6 a barrel after Hurricane Gustav spared major damage to the vast U.S. energy infrastructure in the Gulf of Mexico.

Light, sweet crude for October delivery fell $5.75 to settle at $109.71 a barrel on the Nymex, after earlier dropping as low as $105.46. It was the lowest trading level since April 4, just before oil began an unprecedented march above $147 per barrel.

Other energy futures also fell sharply. Heating oil futures fell 11.83 cents to settle at $3.0736 a gallon, while gasoline futures lost 12.05 cents to settle at $2.7337 a gallon.

The sell-off in crude sent grain prices sharply lower.

Wheat for December delivery fell 34.5 cents to $7.6675 a bushel, while December corn fell 15.75 cents to $5.6925 a bushel.

December oats fell 2.25 cents to $3.60 a bushel, while November soybeans lost 25.5 cents to $12.985 a bushel.

AP-ES-09-02-08 1747EDT

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