MARKETS-COMMODITIES By Barani Krishnan NEW YORK, Oct 30 (Reuters) - Commodities gave back part of the previous session's hefty gains as a rebound in the dollar and the beckoning weekend prompted players to take profit on Friday, traders said. Key markets such as oil and copper were down about 2 percent each by 1500 GMT, while others like gold, corn and sugar fell up to 1 percent as the dollar gained ground against the euro. "We're seeing profit-taking from those who bought yesterday," said David Sadler, a senior futures dealer for sugar in London. The Reuters/Jefferies CRB index, a broad basket of 19 commodities, was down 1 percent. The CRB had risen by more than 2 percent on Thursday while the dollar fell steeply as investors' risk appetite rose on third-quarter U.S. economic data signaling a possible end to the recession. A weak dollar makes dollar-denominated commodities cheaper, and more attractive, for holders of the euro and other currencies. A stronger dollar creates the opposite effect. More evidence of economic growth on Friday -- data showing stronger business activity in the U.S. Midwest since September -- made investors more confident about the dollar's prospects versus commodities. "GDP is the reason for the recent upward blip (in commodities) but I think the reality will be short lived," said Neil Buxton, managing director at GFMS, a U.K.-based precious metals consultancy. Edward Meir, analyst for base metals and energy at MF Global in New York, concurred with that view: "We would argue for a slight pause here before switching allegiances completely to the buy side (of commodities). "If anything, markets should come around to the more likely conclusion that the dollar should strengthen going forward in the wake of reviving U.S. growth," Meir said, adding that he expected a rollback in the stimulus programs that had hurt sentiment in the dollar. Crude oil's benchmark front-month contract in New York fell $1.63 to a session low of $78.24 a barrel -- breaking below the $80 level which had been an important psychological support for the market for more than a week now. Oil prices have more than doubled from the recession's lows of around $33 a barrel in January, although they are slightly over half of last year's record highs of nearly $150. Some analysts think the market is overpriced, given the weak physical demand for oil. They cite data such as total U.S. oil product demand, which has dropped by about 3 percent from a year earlier. In copper, New York's most-actively traded contract, December, fell 5.6 cents to a session low of $2.9735 a lb -- breaking the $3-per-lb psychological support established a week ago. Benchmark copper on the London Metal Exchange traded down $84.50 at $6,580 a tonne. Copper, like oil, suffers from demand problems. LME inventories of the metal, used in power and construction, stand near five-month peaks and traders report there is not much consumption of copper outside of China. China imported record volumes of copper in early 2009 but has slowed down in recent months. Data this week showed a decline in September sales of newly built U.S. single-family homes, putting a further cloud on the demand for copper. (Editing by Christian Wiessner)

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