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LONDON - Gold on Wednesday hit its lowest in more than three months and silver fell to its weakest in more than five months as commodities were hit by the latest wave of risk aversion in global financial markets.

Gold has traditionally been seen as a haven for investor money but more recently has been put in the same category as other commodities, which are considered risky investments.

"We've seen this countless times. When there is a whiff of risk aversion...gold like any other commodity tends to get affected by long liquidation and that's what we're seeing," said Robin Bhar, metals analyst at UBS Investment Bank.

Spot gold fell as low as $638.90 an ounce in Asian trade, its weakest since mid-March, but then attracted light buying in Europe.

Prices were at $642.85/643.45 by 0950 GMT, mostly flat from $642.00/642.60 late in New York on Tuesday.

Spot silver dropped to $12.11 an ounce, its lowest since January 8, but was last at $12.27/12.30 versus $12.24/12.27.

The yen rose broadly and high-yielding currencies dipped as worries about the U.S. subprime mortgage sector dimmed appetite for the carry trade and caused investors to clamp down on risk.

EXCHANGE-TRADED GOLD VOLUMES DROP

"Behind the slump in the New York (gold futures) market is risk aversion," Satoshi Matsunaga, analyst at Mitsui Bussan Futures Ltd.'s investment strategy section, said, adding that this was reflected in a fall in gold bullion holdings in the StreetTRACKS exchange-traded fund (ETF).

Simon Weeks, bullion director at ScotiaMocatta, said it was the biggest one-day decrease in the fund since its creation just over two years ago.