LONDON: Commodity markets diverged this week, torn between strong global economic data, and ongoing worries over the possible withdrawal of US Federal Reserve stimulus.
Encouraging economic data from Britain, China, the eurozone and the United States sparked hopes of keen demand for many raw materials, providing limited support for some commodities.
Arabica coffee and sugar prices sank as the Brazilian real currency tumbled on fears that the Fed's possible move could spark outflows of foreign cash. Brazil is a major producer of both soft commodities.
The Fed's vast stimulus policy was launched last year to support growth of the US economy, which is the world's biggest.
OIL: Brent oil prices rose on demand hopes, bright data and geopolitical worries in the crude-rich Middle East region.
"Brent prices pushed higher at the end of the week following positive economic data released from China, the US, the eurozone and the UK," said analyst Lucy Sidebotham at British-based energy consultancy Inenco.
"This showed the global economy to be recovering and could point towards higher oil demand."
The number of Americans seeking unemployment benefits rose last week but the trend in layoffs continued to push lower, data showed Thursday.
Initial jobless claims totalled 336,000 in the week ending August 17, a gain of 13,000 from the prior week.
In the eurozone, the preliminary composite purchasing managers index of business activity (PMI) hit a 26-month high of 51.7 points for August from 50.5 in July. Anything above 50 indicates expansion, while below 50 points to contraction.
And in the United States the flash PMI came in at 53.9, up from a final July reading of 53.7.
The data followed a similar upturn in China, where HSBC said its PMI reading hit a four-month high of 50.1.
In Europe on Friday, British economic growth was upgraded to 0.7 percent for the second quarter.
Traders meanwhile worried that Egyptian unrest could hit crude shipments through the Suez Canal and Sumed Pipeline, which provide a link between Europe and oil producers in the Gulf.
Egypt's toppled dictator Hosni Mubarak was transferred from prison to house arrest at a military hospital on Thursday.
The decision added a volatile new element to the political turmoil that has gripped Egypt since the army ousted Islamist president Mohamed Morsi in early July.
Egypt is not a major oil producer but the Suez canal carries about 2.5 million barrels daily, or 2.7 percent of global supply.
Further oil price support stemmed from supply outages in Libya.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in October advanced to $111.06 a barrel compared with $110.01 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for September eased to $106.20 a barrel, from $107.59.
PRECIOUS METALS: Gold, silver and platinum hit multi-month highs on expectations that recent strong global data will translate into buoyant demand.
Gold rallied on Monday to $1,384.55 per ounce -- the highest level since June. Silver rallied to $23.63, striking a peak last seen in mid-May.
"The feel-good factor -- the big economies around the world are all improving -- has easily spilled over into the precious metal market," said Capital Spreads dealer Jonathan Sudaria.
The dollar meanwhile finished on a flat note, after minutes of the July 30-31 meeting of the Federal Open Market Committee showed the Fed continued to debate the timing of tapering or pulling back its $85-billion per month in bond-buying purchases.
By late Friday on the London Bullion Market, the price of gold rallied to $1,377.50 an ounce from $1,369.25 a week earlier.
Silver climbed to $23.06 an ounce from $22.83.
On the London Platinum and Palladium Market, platinum increased to $1,538 an ounce from $1,524.
Palladium eased to $752 an ounce from $762.
BASE METALS: Base or industrial metals mostly fell, as some traders questioned the economic strength of key consumer China.
"We continue to think the backdrop for commodities in general, and industrial metals in particular, will be very challenging," said Capital Economics analyst Ross Strachan.
He added: "China's rebound has been largely built on a rapid expansion of credit, so it is unlikely to be sustained.
"Furthermore, although the new orders component of China's PMI reached a four-month high in August, it is still only consistent with a stabilisation of global copper prices."
By Friday on the London Metal Exchange, copper for delivery in three months declined to $7,335 a tonne from $7,381 a week earlier.
Three-month aluminium slipped to $1,885 a tonne from $1,927.
Three-month lead fell to $2,214 a tonne from $2,234.
Three-month tin firmed to $21,919 a tonne from $21,800.
Three-month nickel dropped to $14,525 a tonne from $14,805.
Three-month zinc slid to $1,971 a tonne from $1,991.50.
COCOA: Cocoa futures sank on forecasts of rainfall in top global producer Ivory Coast.
"The most important role in this ... is played by the prediction of rainfall in Ivory Coast, which improves the prospects for the main crop that will start being harvested in October," said Commerzbank analysts.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in December fell to £1,628 a tonne from £1,652 a week earlier.
On New York's NYBOT-ICE exchange, cocoa for December dipped to $2,461 a tonne compared with $2,491 a week earlier.
COFFEE: Coffee prices dived on the back of abundant supplies and slumping currencies in emerging market producer nations.
Arabica coffee sank to 116.35 US cents per pound, which was the lowest level since July 2009.
"Besides the prospect of plentiful supply, the collapse of the currencies of key producer countries is weighing on prices," said Commerzbank analysts.
"This is particularly true of the Brazilian real, given that Brazil is by far the most important producer of both Arabica coffee and sugar."
The Bank of Brazil said is ready to intervene heavily on currency markets from Friday, making available $55 billion to prop up the sagging real, which remains close to a four-year dollar low.
Investors are fleeing emerging market currencies, as they seek greater returns amid fears that the US Federal Reserve may soon wind down its huge stimulus programme.
By Friday on NYBOT-ICE, Arabica for delivery in December sank to 116.90 US cents a pound from 124.70 cents a week earlier.
On LIFFE, Robusta for November dived to $1,781 a tonne from $1,920.
SUGAR: Prices headed lower, hit also by the weak Brazilian real.
By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in October decreased to 16.34 US cents a pound from 17.23 cents a week earlier.
On LIFFE, the price of a tonne of white sugar for October reversed to $482.90 from $507.
RUBBER: Prices gained strength due to a weak ringgit and speculative buying, traders said.
The Malaysian Rubber Board's benchmark SMR20 rose to 240.00 US cents a kilo from 238.90 cents the previous week.
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