Oil falls below $89; gold hits 11-day low

London: Oil slid by almost $2 to a six-week low below $89 a barrel on Monday as stock markets fell and concern mounted over an economic slow-down led by top consumer the United States.

US crude fell by $1.57 to $89.00 by 9:17 a.m. EST in electronic trade, just off a session low of $88.67, which was the lowest level since December 11.

Oil has dropped by more than 10 per cent from a record high of $100.09 hit on January 3.

Floor trading on the New York Mercantile Exchange (Nymex) is shut on Monday for the Martin Luther King holiday.

London Brent crude was down $1.29 at $87.94.

"The economic slowdown is dominating sentiment today," Tony Machacek at Bache Commodities said.

Gold hits 11-day low

Gold hit an 11-day low on Monday as a weaker euro versus the dollar encouraged investors to lock in profits from last week's run to record highs, but broader financial market uncertainty was seen limiting losses.

Spot gold stood at $868.60/869.80 per troy ounce by 6:56 a.m. EST, compared with $881.90/882.60 in New York quoted late in New York on Friday. Market volatility was high, due to the Martin Luther King Day holiday in US.

The market is now some 4.5 per cent away from the record highs hit at $914 per ounce last week, but dealers and analysts said prices could benefit eventually as worries over the possibility of a US recession intensify.