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Gold rebounded more than 2.5 % after falling to two-year lows and oil cut losses following another sell-off on Tuesday, although shares dropped for a third day as worries over the health of the global economy prevailed.
The broad rout in commodities and stocks seen in recent sessions has been triggered by weak data from China and the United States that have sparked fresh concerns about the strength of the global economy's recovery.
A closely watched survey of German economic sentiment added to the worries after the euro zone crisis and economic weakness were blamed for a larger-than-expected drop in confidence in Europe's biggest economy.
There was no sign though of a complete collapse in sentiment that some economists had feared following the recent bungled bailout of Cyprus and the relief helped shares, looking to avoid their third straight day of falls, prune losses.
MSCI's global share index, which tracks around 9,000 stocks in 45 countries, was down almost flat ahead of the restart of trading on Wall Street, having been almost 0.5 % lower earlier in the day.
Futures prices pointed to a rebound for U.S. stocks following Monday's sharp losses which were triggered by a bombing at the finishing line of the Boston marathon.
Investors will eye a batch of earnings reports, with 11 S&P 500 companies due to post results. Goldman Sachs set the pace as bumper fees helped it report a stronger-than-expected 5.5 % rise in its quarterly profit.
Pressure was also easing on European shares as the upbeat mood coming from the U.S. added to the German data relief from earlier.
By 1220GMT London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX had turned around most of their earlier 0.7-0.8 % losses. The euro had also climbed almost 1 % to back above $1.3140.
"New uncertainty stemming from the euro crisis and doubts about the strength of Chinese economy seem to have dented analysts' optimism. However, it only looks like a correction at a level still consistent with modest growth," said ING economist Carsten Brzeski.
"The big confidence collapse some had expected after the Cypriot bailout has so far failed to appear."
GOLD STEADIES
Gold, which has dominated market attention in recent days, was hovering 2.6 % higher at $1,386.15 an ounce as the near-vertical $230 drop in the past two sessions lured back buyers.
Other precious metals such as platinum and palladium also bounced back along with copper, while silver snapped a four-day losing streak.
Gold's recovery comes a day after it shed $125 an ounce, its biggest ever daily drop. It has now fallen about 20 % this year after an unbroken 12 years of gains and is some 28 % down from the September 2011 record high of $1,920.30.
"I think everyone has to take a breath and it's likely that we'll see some rangebound trade. But there are people who still want to sell and they haven't done so yet," said David Govett, head of precious metals at Marex Spectron.
Analysts have cited various reasons for gold's latest slump, including funds switching out of bullion and that other central banks in Europe could use Cyprus's bailout plans sell excess gold reserves as a reason to sell some of their own holdings.
The already sharp correction has caused short-term investors to flee the asset. The SPDR Gold Trust hit its highest ever daily volume on Monday with 92.44 million shares traded. The ETF lost 8.8 %.
Silver and palladium rose over 6 %, while platinum gained 4 %. Copper rose over 1.5 % to $7,266 a tonne, after hitting $7,085 on Monday, its cheapest since October 2011.
OIL AT $100
Oil, another key commodity that has been caught up in the sell-off, also stabilised.
It had fallen below $100 a barrel for the first time in nine months in Asian trading before the rout eased and before a major 7.8 magnitude earthquake in oil exporter Iran [ID:nL5N0D3299] triggered additional buying to leave it at $100.13.
Saudi Arabia, the world's largest oil producer has signalled $100 as the lower limit of its comfort zone and Ian Taylor, head of the world's biggest oil trader Vitol, said on Tuesday that oil prices were unlikely to fall much further for now.
"I think it has done what it is going to do for a while," the Vitol group president and chief executive told Reuters.
U.S. stock futures were up around 0.8 %, pointing to a rebound on Wall Street after Monday's 2 % drop which came after two bombs ripped through the crowd at the finish line of the Boston Marathon on Monday killing at least three people and injuring more than 100.
European bond markets were again quite but in the foreign exchange market commodity-linked currencies were back in focus following the recent sell-off, while the safe-haven rush into the yen after the bombings in Boston began to run out of steam.
The U.S. dollar was broadly weaker but rose 1 % against the yen to 97.80 yen, though it was still down about 2 % from a four-year high of 99.95 yen hit last week following the Bank of Japan's $1.4 trillion stimulus launch announced on April 4.
"We had a clear rout of positions in the past few days," said Paul Robson, senior currency strategist at RBS. "But any pullback in dollar/yen is temporary and we are fairly confident that dollar will rise against the yen in the medium term given capital outflows from domestic Japanese investors."
