A barrage of worrisome corporate earnings has deepened investors' pessimism about the direction of the economy, prompting them to shift funds into less risky assets like government bonds.

At the same time, a sharply stronger dollar is feeding selling of commodities bought as a hedge against inflation and weakness in the US currency.

Gold for December delivery fell US$32.80 (S$49.27) to settle at US$735.20 an ounce on the New York Mercantile Exchange, after earlier dipping to US$720, the lowest level since Sept 4, 2007.

'We have now come full circle .... The remaining question now emerging is: has gold seen its lows, or are we at the start of a phase in the mid-to-high $600s? There is plenty of uncertainty on that front,' Mr Jon Nadler, analyst with Kitco Bullion Dealers, said in a note.

Other precious metals also tumbled. December silver fell 61.5 cents to settle at US$9.46 an ounce on the Nymex, while December copper dropped 14.15 cents to settle at US$1.8655 a pound.

In energy trading, oil prices fell below US$67 a barrel to 16-month lows on Wednesday after the government reported big increases in US fuel supplies - more evidence that the economic downturn is drying up energy demand.

Light, sweet crude for December delivery fell US$5.43 to settle at US$66.75 on the Nymex, after falling as low as US$66.20.

It was the lowest close for a front-month contract since June 13, 2007, when crude settled at US$66.26.

Meanwhile, agriculture futures fell on the Chicago Board of Trade.

Wheat for December delivery lost 31.25 cents to settle at US$5.1775 a bushel, while December corn fell 26 cents to settle at US$3.85 a bushel.

December soybeans lost 50.5 cents to settle at US$8.6475 a bushel.

Falling commodities prices have come at heavy cost for producing countries. In Argentina, the steep pullback in the price of soy, wheat, corn and beef have slashed export income, a key source of government revenue.

In a surprise move, Argentina said on Tuesday that would nationalise US$30.1 billion in private pension funds in response to the global fiscal crisis. -- AP