Commodity markets took a hit on Friday as investors recoiled from risk and piled into dollars, with fears of a Dubai debt default serving as a sharp reminder of the turmoil created by the global financial crisis.

Global stocks sold off sharply on Friday, with Asia's Kospi and Hang Seng indexes down over 4 percent, as concerns about contagion from Dubai's debt crisis curb investors' appetite for riskier assets.

Oil prices dropped more than 2 percent on Friday as fears of possible defaults in Dubai convulsed financial markets and boosted safe-haven demand for the U.S. dollar.

Gold fell in choppy trade Friday but finished well above session lows as a dollar rally fizzled and investors bet that the metal's unique safe-haven appeal would stay intact in the wake of Dubai debt default fears.

Global stocks were lower on Thursday, with China's Shanghai Composite closing 3.6 percent lower, while gold hit another new record to $1,194.90 an ounce, as Debt problems in Dubai curbed investors' risk appetite.

Oil fell towards $77 on Thursday in line with falls across financial markets and as weak demand for fuel offset potential support from a weak dollar.

Gold fell over 1 percent from a record high hit earlier on Thursday as the dollar bounced from its lows, but the metal still eyed new peaks due to prospects for central bank buying and further dollar weakness.

Global miner BHP Billiton dismissed talk on Thursday that its iron ore partner, Rio Tinto, was baulking at their proposed $116 billion joint venture and said they were close to a binding agreement.

U.S crude oil is expected to rise to an average of $75.40 a barrel in 2010, a Reuters poll showed on Wednesday, but analysts said a deep pool of global supply would keep short-term price growth in check.

Global stocks rose on Wednesday, with gold hitting another new high above $1,178 an ounce, after the Federal Reserve raised U.S. growth forecasts for 2010. Experts told CNBC liquidity will continue to drive stocks up, but that investors should see dips as short-term buying opportunities.

Gold prices hit record highs above $1,190 an ounce in Europe on Wednesday, boosted by the euro's move through $1.50 against the dollar and by a report that India may consider buying more bullion from the IMF.

Crude oil prices rose more than 2 percent Wednesday, supported by lower-than-expected builds in U.S. oil inventories last week, a weak U.S. dollar and gains on Wall Street.

Gold struck a record high for a second time this week, rising above $1,177 an ounce on Wednesday, as the dollar slipped and a newspaper reported that India was "open to buying" more gold from the International Monetary Fund.

Australia's wheat exporters will face greater challenges in finding buyers for the 2009/10 crop due to ample global supplies and a strong Australian dollar, grain handler GrainCorp said on Wednesday.

With gold trading at record highs, Newmont Mining's Twin Creeks mine is one valuable piece of property. And the company is mining it for all it is worth.