NEW YORK—Gold prices sank Thursday, approaching $800 an ounce after another drop in crude oil and a stronger dollar diminished demand for the metal as a hedge against inflation. Silver and copper also fell.

Other commodities traded mostly higher, with corn and wheat futures gaining.

Gold began the day higher but quickly reversed course after the dollar muscled higher against the euro, which has lost some luster lately on signs that European economies are slowing.

The 15-nation euro bought $1.4811 in afternoon trading, down from its level of $1.4934 in late t...