LONDON, Aug 21: Gold slipped with stock markets and other commodities on Tuesday as fears about the effect of a global credit squeezed lingered, analysts said.

Oil, industrial metals and share prices were all lower, while gold’s traditional appeal as a safe haven in times of economic trouble has waned.

The development of the gold price today will depend again to a large extent on the movements in global stock markets, analysts at Dresdner Kleinwort said in a market report.

By 1007 GMT, spot gold was quoted at $655.50/656.10 per ounce, down from $657.60/658.20 late in New York on Monday, when it gained more than $2 an ounce on a weaker dollar.

At its current level, gold is around 3 per cent up since the start of the year, but down 5 per cent from its April high.

The FTSE share index was down 0.2 per cent, London Metal Exchange copper futures were 0.6 per cent down and US crude oil fell 43 cents to $70.69 per barrel.

Markets have been battered over the past month by worries about financial instability following trouble with risky US mortgages and a squeeze on credit.

Fears of a global liquidity crisis ignited a broad sell-off in financial markets last week that spilled into commodities and sent gold to a 7-week low of $641.10 on Thursday — a sign that safe-haven gold was now behaving much like other assets.

Investors sold gold for cash to cover margin calls on losses arising from a meltdown in the U.S. subprime mortgage market, the repercussions of which are still being felt despite United States central bank intervention.

The Fed move last Friday has calmed markets, but concerns about the fall-out of the sub-prime mortgage crisis are still in the markets.—Reuters