By Eric Onstad and Manolo Serapio Jr., Reuters
Gold, crude oil and grains surged on Monday while industrial metals slid as investors reacted to escalating tensions between Moscow and Kiev after the Russian military tightened its grip on Ukraine's Crimea region.
Concern about supplies pushed up crude oil prices by more than $2 a barrel and wheat and corn by 4-6 percent. Safe-haven buying sent gold prices to four-month highs.
Base metals such as copper fell along with shares as investors ditched higher-risk assets and due to worries that a conflict could damage global growth.
"Trade sanctions and a general ratcheting up of global tensions could also endanger the fragile global economic recovery now under way, hurting commodity prices in the process," analyst Edward Meir at broker INTL FCStone said.
Ukraine said Russia was building up armoured vehicles on its side of a narrow stretch of water closest to Crimea after President Vladimir Putin declared at the weekend Russia had the right to invade his neighbour to protect Russian interests.
Russia is one of the world's biggest oil producers. Newly installed Ukrainian Prime Minister Arseny Yatseniuk said Moscow's move to use military force was a "declaration of war".
Brent crude climbed 3 percent to a session high of $112.39 per barrel, its loftiest since Dec. 30.
U.S. crude for April delivery jumped as much as 2.3 percent to a high of $104.97 a barrel, the strongest since Sept. 23.
"Oil markets are reacting on the potential that the situation could worsen," said Ben Le Brun, market analyst at OptionsXpress in Sydney.
"But I definitely suspect oil will move much higher, if it actually comes to war. U.S. crude could easily surpass $110 and a $120 target is not out of the question."
Spot gold skated 1.9 percent higher to a peak of $1,350.80 an ounce, the highest since Oct. 30 as investors fled to assets regarded as safe havens. Gold was also headed for its biggest daily gain since Jan. 23.
"There is an ongoing shift in sentiment indicative of investors seeing some upside from geopolitical concerns, some safe-haven bids coming out of emerging markets and possibly a more neutral outlook towards equities," Mitsubishi Corp analyst Jonathan Butler said.
Industrial metals went the opposite direction.
Copper on the London Metal Exchange gave up 0.9 percent to a low of $6,944, its weakest since early December, and aluminium dropped 2.2 percent to a low of $1,715.
The sabre-rattling in Ukraine weighed on the euro and helped bolster the dollar, making dollar-priced metals costlier for non-U.S. investors.
Also hitting metals was data that showed activity in China's factory sector slowed to an eight-month low in February, reinforcing signs of a modest slowdown in the world's No. 2 economy as demand weakens.
China is the world's top user of the base metal, accounting for about 40 percent of global demand.
Wheat futures rose nearly 6 percent and corn about 4 percent as tensions in Ukraine stoked fears of disruption to shipments from the Black Sea, one of the world's key grain-exporting zones.
Chicago Board of Trade May wheat jumped as much as 5.9 percent to $6.38 a bushel, a level last seen on the contract in mid-December.
Ukraine, among the world's top suppliers of wheat, is forecast to export 10 million tonnes of the grain in 2013/14, according to estimates from the U.S. Department of Agriculture (USDA). Russia's shipments are projected to reach 16.5 million tonnes.
Chicago corn climbed 4.2 percent to a session high of $4.82-3/4, marking a level last seen in mid-September.
Ukraine is forecast to export 18.5 million tonnes of corn in the current marketing season, representing 16 percent of world trade, according to the USDA.
"The market is concerned that the tensions in that part of the world could curb export activity," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia. "The importance of the Black Sea region to global grain markets should not be understated."
In soft commodities, arabica coffee futures turned lower after climbing to a 17-month high as dealers sought to assess the extent to which dry weather in Brazil in the last couple of months will reduce the size of this year's crop.
(Editing by Muralikumar Anantharaman and Dale Hudson)