Gold climbed to a record high and oil fell on Thursday as investors fled to safe haven assets following another sharp sell-off on Wall Street, sparked by fears that Europe's debt crisis could spread to France.
The euro's financial woes returned to focus on rumours France may be in trouble, stealing the spotlight from the US Federal Reserve's promise to keep interest rates low for at least another two years.
"It all appears to be about confidence," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney. "Each bit of negative news erodes confidence and that erodes demand."
Although they were denied, rumours of an impending downgrade of France's credit rating and the financial health of a key bank in the country rattled markets, sending US stocks tumbling more than 4% on Wednesday.
Asian stocks opened lower on Thursday, but have since recovered on support from rising U.S. stock futures -- indicating a rebound when Wall Street reopens.
Spot gold hit an all-time high of $1,813.79 an ounce, while US gold also hit a record of $1,817.60.
The relative strength index for spot gold rose to near 86, the highest since October 2010, suggesting a heavily overbought market.
"Gold remains the last protection against the potential for widescale money printing as governments seek to recapitalise their banks and restimulate their economies," UBS said in a research note.
Brent crude oil briefly fell more than a dollar to an intraday low of $105 a barrel on demand worries, while US crude traded down 33 cents at $82.56.
Brent has fallen around 4 percent since ratings agency Standard & Poor's cut the top-tier credit rating of the United States on Friday.
The worsening economic outlook for developed countries overshadowed a drawdown of 5.23 million barrels in US crude stocks, which confounded analysts' expectations for a 1.5 million barrel increase.
"Market sentiment appears to be outweighing market fundamentals, which is likely to create bouts of overshooting on the downside for commodities," said analysts at ANZ Bank in a research note.
"We expected the fundamentals vs. sentiment theme to drive prices in the near term."
Copper bucked the commodities trend, rising 2.91 percent to $8,845 a tonne on China's strong July trade figures.
China's exports hit a record high in July as shipments to Europe and the United States proved surprisingly buoyant, allaying concerns that debt problems abroad may hold back the world's No. 2 economy.
In agricultural markets, U.S. wheat futures edged lower, while corn and soybeans were slightly higher.
Wheat for September delivery dipped 0.5 cents to $6.84-1/2 per bushel on the Chicago Board of Trade, underpinned by expectations that the U.S. government would cut production data in a report due to be published later on Thursday.