Gold prices shot up as investors' faith in stock markets dimmed further, touching off a desperate dash for safe alternative investments.

The pullbacks in crude oil, corn, copper and other commodities came as investors accepted the reality that a US$700 billion (S$1 trillion) financial rescue plan approved on Friday won't provide a quick solution to the worsening credit crisis.

A significantly stronger dollar also weighed on commodities.

In the latest sign of the growing scope of the crisis, European governments over the weekend raced to shore up failing banks.

Germany agreed to a US$68 billion bailout for commercial-property lender Hypo Real Estate Holding AG and France's BNP Paribas said it would buy a 75 per cent stake in Fortis's Belgium bank after a government rescue failed. Ireland, Greece, Iceland and Denmark also moved to guarantee bank deposits.

Investors viewed the global market plunge as further proof that a painful and sustained economic downturn lay ahead despite the government's historic bailout package.

'Some people think it was too little, too late,' said Mr Tom Pawlicki, commodities analyst with MF Global Research in Chicago.

'The contagion of the crisis is moving on to other parts of the world and it's going to be negative for commodities demand.' In agriculture trading, virtually all major grains traded lower.

Corn for December delivery fell 28 cents, or 6.17 per cent, to US$4.26 a bushel on the Chicago Board of Trade, while November soybeans declined 53.25 cents, or 5.37 per cent to US$9.3875 a bushel.

December wheat fell 30.25 cents, or 4.72 per cent, to US$6.10 a bushel.

'Fundamentals mean little in this market as traders continue to focus almost exclusively on the overall economic situation,' Mr Vic Lespinasse of Grainanalyst.com said in a note.

The dour outlook also weighed on oil prices. If the financial crisis continues to spread and economies in Europe and beyond fall into decline, consumers and businesses everywhere will be forced to reduce energy use.

Light, sweet crude for November delivery fell US$4.25 to US$89.63 a barrel on the New York Mercantile Exchange, after earlier dipping to US$88.89, the lowest level since Feb 8.

On Friday, the November contract lost 9 cents to close at US$93.88 a barrel.

In other Nymex trading, heating oil futures fell 13.7 cents to US$2.525 a gallon, while gasoline prices dropped 12.33 cents to US$2.105 a gallon.

The deepening anxiety boosted demand for gold. The precious metal often becomes more attractive during times of economic crisis because it's known for holding its value.

Gold for December delivery jumped US$44, or 3.96 per cent, to US$866.20 an ounce on the Nymex, after earlier rising as US$879.

'It's definitely a risk aversion play that's supporting gold,' said Mr Pawlicki.

Other precious metals traded mixed.

December silver rose 4.5 cents to US$11.37 an ounce on the Nymex, while December copper lost 20.35 cents to US$2.4865 a pound. -- AP