The spectre of a recession in the United States gripped the commodity markets yesterday, causing investors to flee base metals such as copper and zinc while speculators pumped up the price of crude oil and gold.

A wave of hot money pushed oil to within cents of $100 a barrel while gold bullion briefly breached the $800 an ounce mark as investors sought safe havens from inflation and the shrinking value of the dollar.

Mounting concern about the risk of a recession in the US is weighing on the price of industrial metals used in construction and manufacturing. Heavy selling of base metals by funds in Asia, provoked by worries about the US housing market, sent the price of copper tumbling.

The red metal, used widely in the construction industry, fell by 4 per cent to $6.575 on the London Metal Exchange. Zinc, used fpr galvanising steel and in batteries, hit a 20-month low, losing 5 per cent of its value in the flight for safety.

Stocks of base metals are building and demand is weakening, said Nick Moore, a metals analyst at ABN Amro. Inventories held by the London Metal Exchange are building rapidly after their erosion at the beginning of the year.

Copper, which was led the metal markets with a spectacular surge last year, is suffering a crisis of confidence, he said, as Chinese imports began to slow.

“The supercycle has a flat tyre,” Mr Moore said, referring to a theory promoted by some analysts and mining groups which suggested that extraordinary demand from China and India would sustain continued long-term growth and prevent the traditional boom and bust cycle of the mining industry. “China is not the tooth fairy that can absorb all the ore.”

Production is rising, with aluminium output at record levels, while nickel inventories at the London Metal Exchange have increased from just hours of supply earlier this year to ten days’ supply. The flight of hot money from cooling metal is heading for safe havens such as gold and platinum as well as crude oil.

US light crude hit a record $99.29 as funds pushed the futures market towards a triple-digit record.

Concern about the relatively low level of crude stocks in OECD countries has kept the crude price buoyant, but oil market analysts are perplexed by the continued surge and are increasingly pointing the finger at speculative investors.

The speculators are pushing oil towards new records despite emerging evidence that the growth in American demand for crude is beginning to abate. Recent Department of Energy data showed that total US oil demand was down almost 1 per cent over the last month.

Speculative trading in oil futures contracts has risen from less than 1 per cent to more than 32 per cent over the five years to 2006, said Pierre Terzian, director of PetroStrategies, a Paris-based think-tank and consultancy.

His analysis of trading on London’s ICE exchange showed that the proportion of trading by “commercial” players in ICE futures contracts over the same period had fallen.

The increased activity of hedge funds was the main cause of the price volatility, he said. “Futures markets are disconnected from fundamentals. Opec’s strategy is not working and needs to be reexamined.”

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