Worries that Europe's debt crisis could drag down the global economy helped drive copper, gold and other commodities lower on Monday. Added pressure came from traders pushing up the dollar against other currencies.
"What's being questioned is if Greece is going to get the next installment of loans it needs to keep going," said Spencer Patton, founder and chief investment officer for Steel Vine Investments, a Chicago-based hedge fund.
If Greece doesn't get that next installment, many economists and investors say it could default on its debts and set off a dangerous chain of events that could tip the U.S. into another recession.
Metals and crude oil fell sharply. Copper, whose price is closely tied to expectations for economic growth, lost 3.8 percent to end at $3.782 per pound.
Benchmark crude lost $2.26, or 2.6 percent, to finish at $85.70 per barrel in New York.
"Copper and crude oil are essentially your biggest indicators for economic health," Patton said. When they fall it's a sign that traders are laying bets the world economy will slow down.
European finance ministers meeting over the weekend offered no new ideas to solve the continent's debt crisis. The officials also delayed authorizing an $11 billion installment of emergency funds for Greece until October. That payment is part of the $150 billion loan package international lenders agreed to provide Greece last year.
As stock markets around the world sold off Monday, traders shifted cash into U.S. government bonds and gave a lift to the U.S. dollar. Commodities priced in dollars often sink when the dollar gains strength, because they are priced in dollars and become more expensive for investors with foreign currency.
Gold fell 2 percent to settle at $1,778.90 an ounce. Silver lost $1.67, or 4.1 percent, to end at $39.163 an ounce.
Other metals also dropped. Platinum sank $41.90, or 2.3 percent, to $1,772 an ounce. Palladium fell $20.85, or 2.8 percent, to $715.65 an ounce.
Most grains were lower. Wheat fell 15 cents, or 2 percent, to end at $6.73 per bushel. Soybeans dropped 19 cents to $13.36 per bushel. Corn edged up 4 cents to $6.9225 per bushel.
In energy trading heating oil lost 6.42 cents, or 2.1 percent, to finish at $2.9447 per gallon and gasoline futures fell 8.76 cents, or 3.2 percent, to end at $2.6965 per gallon. Natural gas was up 2 cents to finish the day at $3.829 per 1,000 cubic feet.