* Copper falls as much as 3 pct, oil down for third day
* Gold bounces, grains shake off weakness on strong demand
* China PMI shrinks for first time in 7 months-HSBC
* Euro zone PMI signals economy to shrink in Q2 (Adds details, quotes; updates prices)
By Eric Onstad and Manolo Serapio Jr
LONDON/SINGAPORE, May 23 (Reuters) - Copper slid 3 percent and oil dropped for a third day on Thursday after factory surveys suggested that China's economic recovery has stalled and that the euro zone economy would contract again in the second quarter.
Gold swam against the tide, however, bouncing and regaining some of its safe-haven allure amid worries of stagnant global economic growth.
Financial markets were already weakened after Federal Reserve Chairman Ben Bernanke on Wednesday hinted at possible cutbacks in the U.S. stimulus plan.
Investors scrambled to sell commodities after China's manufacturing activity shrank for the first time in seven months in May, suggesting it may be tough for the economy to meet the government's 7.5 percent growth target this year, analysts said.
China is the world's biggest consumer of raw materials, ranging from copper to iron ore, and it is the second-largest buyer of crude oil and gold.
Share markets also fell sharply as investors piled back into safer assets such as German bunds.
"The PMI data reinforces that the outlook for China's economy is on the softer side of expectations to put it mildly," said Vishnu Varathan, market economist at Mizuho Corporate Bank.
"As such, commodity demand remains questionable."
COPPER HARD HIT
Industrial metals were among the hardest hit, including copper, dependent on China for about 40 percent of global demand.
Three-month copper on the London Metal Exchange tumbled 3.0 percent to an intraday low of $7,250 a tonne, before paring losses to about 2 percent.
The copper market got support from a series of recent events that have restricted supply, including the closure of the Grasberg mine in Indonesia, the world's No. 2 copper mine, after an accident.
"It may be that the supply side comes to the rescue of a fairly weak demand uptick so far in copper," said analyst Robin Bhar at Societe Generale in London.
Other base metals also fell, with nickel, zinc , aluminium and lead all down more than 1 percent.
Brent crude oil fell below $102 a barrel as ample supply compounded worries about the Chinese and European economies. Brent lost more than a dollar to hit a low of $101.06, its weakest since May 2. Prices are down sharply from a 2013 high of $119.17 reached on Feb. 8.
U.S. crude also fell more than a dollar to $92.67, its lowest in a week.
Both Brent and West Texas Intermediate crude had fallen by the most in three weeks on Wednesday, hurt by a surprise increase in U.S. gasoline stockpiles which pointed to slow demand during the peak driving season.
Spot gold gained as much as 2 percent to $1,395.46 an ounce as funds flowed back from equities and as a weaker dollar offered support.
But gold, down nearly 20 percent this year, could come under more selling pressure.
"Over the coming months the general trend is for a modest economic recovery in the developed markets and that's going to fuel growth in the equity markets and the dollar," Mitsubishi analyst Jonathan Butler said.
"This, together with expectations of tightening quantitative easing, should see gold coming under pressure."
In agricultural markets, supportive demand and caution about weather in a sensitive period for northern hemisphere crops helped grain prices shake off steeper losses in other commodities.
Chicago new-crop corn futures climbed to a one-week high on the back of demand from China and U.S. ethanol makers, before edging lower. The Chicago Board of Trade December contract inched down 0.5 percent to $5.28 a bushel.
Old-crop soybean futures extended a rally to hit an eight-month peak, with a port strike in major exporter Argentina increasing the focus on tight short-term supply of the oilseed.
CBOT July was up 0.2 percent at $14.96-3/4 a bushel, after climbing earlier to $15.02-1/2, a highest level for the contract since late September.
In softs markets, raw sugar and arabica coffee futures hit multi-year lows, in line with other weak commodity markets. Cocoa futures also eased in early trade. (Additional reporting by Clara Denina, Alex Lawler, Gus Trompiz and Naveen Thukral; editing by Keiron Henderson)