NEW YORK (MarketWatch) -- Copper futures sank nearly 2% on Monday, as concerns about a trade war between China and the U.S. fueled concerns about the global economy, fueling safe-haven demand the dollar and pressuring commodities.
Over the weekend, Washington imposed stiff tariffs on Chinese-made tires, and China said it would launch an anti-dumping investigation into U.S. sales of chicken and auto products.
Copper for December delivery was last down 5 cents, or 1.6%, at $2.80 a pound, after earlier falling to a low of $2.76.
Safe-haven demand for the dollar also pressured precious metals, such as gold, and other commodities such as crude oil.
The dollar index (DXY 76.69, +0.04, +0.05%) stood at 76.976, from 76.662 late Friday.
Gold for December delivery was down $7.00, or 0.7%, at $999.40 an ounce.
Markets, however, showed a fairly limited reaction to the trade jitters.
"Although the temptation for protectionism is presumably stronger during a period of global economic slump, the attractiveness of a trade war when the global supply chain is so integrated is limited," said Steven Englander, currency strategist at Barclays Capital, in a note.
"Focusing on growth, it is pretty clear that all countries would quickly be losers from a trade conflict," he said.
