A leading index of commodities prices fell to a four-year low, with crude oil in New York dropping below $70 a barrel amid mounting fears that the global economy was heading into a recession.

The Reuters-Jefferies CRB index, a global benchmark for commodities, on Thursday dropped 2.5 per cent to 275.9, the lowest level since September 2004.

The raw materials sell-off engulfed gold prices as investors sold commodities indices, such as the popular S&P GSCI or DJ-AIG, in which gold futures are also present.

In London, spot bullion dropped to a one-month low of $783.80 a troy ounce. It later was down $45.30 to $802.80. In New York, Comex futures for December were at $804.20 an ounce.

Gold prices have weakened in the past few days after surging above $925 an ounce. But physical demand, particularly for small bars and coins, continues to be strong, although at a slower pace than in the weeks following the collapse of Lehman Brothers, traders said.

Zurich Cantonal Bank said on Wednesday that its gold vault was full and it was seeking another secure deposit for its bullion-backed exchange traded fund after gold holdings hit a record 2.66m ounces.

Investors' worries about a global recession hit the base metal and energy sectors particularly badly.

Copper, the base metals bellwether, tumbled to a 34-month low of $4,545 a tonne on concerns that the previously booming global construction business is grinding to a halt. It later traded at $4,640 a tonne, down 3.7 per cent on the day. Lead dropped 7.3 per cent to $1,385 a tonne, while nickel dropped 5.1 per cent to $11,150 a tonne.

Oil prices fell below the $70 a barrel level for the first time in more than a year, with US oil futures hitting an intraday low of $68.57 a barrel, after the US Department of Energy on Thursday reported a larger than expected increase in the country's crude stocks and a fall in total oil consumption.

In late afternoon trading in London, Nymex November West Texas Intermediate fell $4.61 to $69.93 a barrel while ICE November Brent fell $4.54 to $66.26 a barrel.

Olivier Jakob, of Switzerland-based consultant Petromatrix, said: "If the global markets are not able to provide a 'V-shaped' recovery and global deleveraging continues, the [oil price] risk for the next 30 days is clearly skewed to the downside."

Opec moved forward to next week an emergency meeting to consider a cut in production.

Abdalla El-Badri, the cartel's secretary general, said Opec had decided to re-schedule an emergency meeting scheduled for late next month to October 24. The move came after Opec warned in a report of "dramatically worsening conditions" in the credit market and a "negative impact on the real economy".

The worsening conditions in the world's economy were reflected in the Baltic Dry Index, a benchmark for shipping cost for bulk commodities such as iron ore, coal or grain, which posted a 6.75 per cent fall on the day to 1,506 points, its lowest level since November 2002.

The average daily cost for the largest dry bulk vessels - known as Capesize and used mostly to ship iron ore from Brazil and Australia to China - on Thursday sunk 11.4 per cent to just $11,580 a day. The Capesize rate has collapsed 95.1 per cent since it hit an all-time high of $233,988 a day in early June.

Agricultural commodities were also sold heavily, with falls in corn and wheat.