COMMODITIES-Flu fears hit raw materials, grains; gold rises

* Flu outbreak sparks raw materials sell-off

* Oil, base metals and grains down as flu-fears spread

* Gold hits 4-week high as investors shun risk (Writes through with fresh quotes, updates prices PVS SNGAPORE)

LONDON, April 27 - Oil fell below $49 while copper shed 4 percent on Monday, as most commodity markets were stalked by fear that a deadly flu outbreak spreading from Mexico may become a pandemic and hurt bids to stabilise the global economy.

Gold prices hit a 4-week high as falling share prices highlighted its appeal as a hedge against global economic uncertainty, while China's recent disclosure of major gold purchases also underpinned sentiment.

Governments around the world were moving to contain the spread of the possible flu pandemic, as a virus that has killed 103 people in Mexico spread to the United States and may have reached as far as New Zealand. Global markets were already feeling the strain of rising uncertainty, with world share prices as measured by MSCI's all-country index down 0.7 percent while the dollar and yen climbed broadly. The Mexican peso fell..

"Equities are weaker and people are getting out of some of the riskier assets and into havens," said David Thurtell analyst at Citigroup in London.

"This will have an impact on food trade, it will have an impact on travel and confidence generally at a time when things are still very fragile -- not ideally timed," he added.

Oil fell 4.6 percent, taking the price below $49. Benchmark copper for three-months delivery on the London Metal Exchange fell to $4,295 a tonne as investors worried about a fresh blow to demand if the disease outbreak worsened.

GRAINS FALL, GOLD GAINS

Grain markets also fell on wariness over potential economic fallout from the flu outbreak. Front month Chicago Board of Trade May soybeans dropped 4.3 percent to $9.95 per bushel, having hit its lowest in over two weeks, and May corn fell 3.7 percent to $3.63-1/2 per bushel.

European rapeseed and grain futures fell in early trade, following CBOT's lead.

"You've got concerns that various countries are banning imports of U.S. meat and that is affecting products like pork, even though the World Health Organisation has said that there appears to be no link," said one Sydney-based trader.

"You expect a normal knee-jerk reaction which will affect the consumption of meat and therefore demand for grains in the animal feed industry."

Despite the name "swine flu," the new strain is not infecting pigs and has never been seen in pigs, but any perception of a link to pigs could provoke a consumer backlash that would reduce demand for pigmeat and livestock feed like soybeans.

Gold hit an intraday high of $918.25 an ounce on Monday, its highest since early April, before slipping to $913.50, still higher than New York's notional close on Friday.

Saxo Bank senior manager Ole Hansen said traders would be watching how the wider markets such as equities react to the prospect of a flu outbreak.

"If there is some worry that this will prolong the slump, or will increase the difficulties of the economy returning to some kind of shape...that might have an impact on gold," he said.

(Additional reporting by Nicholas Trevethan in Singapore)