COMMODITIES-Oil drops to 4-year low, China metals tumble on recession fears

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Trade war escalates with new China tariffs on U.S. goods

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Investors fear full-blown global trade war will ravage economy

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Oil prices hit lowest since 2021 amid recession fears

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Base metals, gold prices fall as investors sell off assets

By Naveen Thukral

SINGAPORE, April 7 (Reuters) - Oil slid around 3% on Monday to its weakest since 2021, while most commodity markets including metals tumbled as an intensifying trade war between the United States and China triggered worries over demand for raw materials.

Gold, which climbed to a record peak last week, also fell amid a wider markets sell-off.

Major stock indexes plunged in Asia as White House officials showed no sign of backing away from their sweeping tariff plans, and investors wagered the mounting risk of recession could see U.S. interest rates cut as early as May.

"The biggest threat to the global goods trading system since World War II is forcing a rapid deleveraging in risk assets and escalation in recession risks," ANZ said in a note.

"Gold's allure as a haven asset failed to protect it from the selloff across global markets."

Responding to U.S. President Donald Trump's tariffs, China on Friday said it would impose additional levies of 34% on American goods, confirming investor fears that a full-blown global trade war is under way and that the global economy may be at risk of a recession.

Brent futures and U.S. West Texas Intermediate crude futures hit their lowest since April 2021. Over the past week, both benchmarks have lost more than 10%.

"The primary driver of the decline is concern that tariffs will weaken the global economy," said Satoru Yoshida, a commodity analyst with Rakuten Securities.

"Additionally, a planned production increase by OPEC+ is also contributing to the selling pressure," he said, adding that retaliatory tariffs from countries beyond China will be a key factor to watch.

Benchmark LME copper, which dropped more than 6% to its lowest since November 2023 in early Asia trade, recovered and was trading up 2% by 0339 GMT.

However, base metal prices in China dropped, with copper on the Shanghai Futures Exchange falling 6%, marking its lowest in more than three months.

Gold has come under pressure as investors sell off bullion to cover losses from the broader market meltdown and to realise profits, potentially meeting margin calls or offsetting declines in other assets.

Japanese rubber futures dropped to their lowest since February 2024 and Malaysian palm oil futures fell for a third consecutive session. (Reporting by Naveen Thukral; Additional reprting by Yuka Obayashi in Tokyo; Editing by Kate Mayberry)