Global commodity markets showed mixed fortunes last week as traders tracked tensions in the Middle East and weather developments in key producing countries. Meanwhile, base metals found support in news of a strike threat at a major copper mine in Chile, while crude oil prices slid on fears of reduced US demand.
On Friday, the Commodities Research Bureau's index of 17 commodities stood at 345.13 points, compared with 338.79 points the previous week.
GOLD: Gold prices advanced, supported by violence in the Middle East and prospects that the US Federal Reserve might soon decide to end its policy of hiking American interest rates. The precious metal benefits from its safe-haven status in times in geopolitical instability.
Meanwhile expectations of a pause to US rate hikes weakens the dollar, which in turn makes dollar-denominated gold cheaper for buyers holding other currencies.
This increases demand for gold, and pushes up its price.
On the London Bullion Market, gold prices stood at 637.10 dollars per ounce at Friday's late fixing, from 634 dollars a week earlier.
SILVER: Silver prices rose after a volatile week. "Silver remains a slave to gold's moves," UBS analyst John Reade said.
On the London Bullion Market, silver prices climbed to 11.34 dollars per ounce at Friday's fixing, from 11.01 dollars the previous week.
PALLADIUM AND PLATINUM: The sister metals steadied amid Middle East concerns and expectations of supply deficits. "Over the last week the platinum price remained fairly stable despite some US dollar weakness," Deutsche Bank analysts noted.
They added that platinum should remain in a supply deficit until 2008.
"For palladium a market deficit is expected to appear in 2008 after seven years of market surpluses," they said.
On the London Platinum and Palladium Market, platinum eased to 1,215 dollars per ounce at the late fixing Friday, from 1,216 dollars the previous week.
Palladium increased to 313 dollars per ounce on Friday from 308 dollars the previous week.
BASE METALS: Base metals prices rose as traders seized on news of a strike threat at the largest copper mine in the world.
"The copper price has benefited from possible industrial action. The market has kept a keen eye on the potential strike at the world's largest copper mine, Chile's Escondida," said Deutsche Bank analysts.
"The impact on the futures market could be more significant given the tightness in global supplies and the recent announcement of a potentially significant supply disruption at Codelco's Chuquicamata mine."
Weak global stockpiles have provided support for prices across the base metals complex in recent months. On Friday, three-month copper prices on the LME rose to 7,590 dollars per tonne from 7,465 dollars the previous week.
Three-month aluminium prices firmed to 2,506 dollars per tonne from 2,500 dollars.
Three-month nickel prices gained to 24,705 dollars per tonne from 23,905 dollars.
Three-month lead prices increased to 1,085 dollars per tonne from 1,055 dollars.
Three-month zinc prices stood at 3,282.50 dollars per tonne from 3,208 dollars.
Three-month tin prices rose to 8,450 dollars per tonne from 8,170 dollars.
OIL: World oil prices fell, hit at the end of the week by evidence of slower US economic growth. However losses were limited owing to supply concerns in Nigeria and the United States as well as tensions in the Middle East amid strong demand.
US economic growth slowed to just 2.5 percent in the three months to June, data showed Friday, as consumers turned nervous in the face of sky-high fuel prices and a cooling property market.
Regarding Nigeria, Anglo-Dutch oil group Royal Dutch Shell this week declared force majeure after a leak in an oil pipeline in southern Nigeria cut output by 180,000 barrels per day.
Separate disruptions blamed on unrest in the Niger Delta brought Nigeria's total production loss to 675,000 barrels per day, or 26 percent of the country's normal daily output, according to an industry source. Supporting prices also was strong demand for gasoline, or petrol, in the United States.
Over the past four weeks, US demand for gasoline has risen by 1.8 percent from the same period in 2005, the US Department of Energy said on Wednesday. Gasoline statistics are under special scrutiny because of peak US demand as many Americans hit the roads for their summer vacations.
Prices were supported also by tensions over Iran's nuclear programme and fighting between Israel and Lebanon. Concerns that the violence could spread to Iran and other major crude-producing nations in the Middle East saw oil prices soar to all-time highs above 78 dollars earlier this month.
At about 1600 GMT on Friday in New York, a barrel of crude for delivery in September fell to 73.05 dollars per barrel from 75.10 dollars the previous week.
In London, a barrel of Brent North Sea crude for delivery in September dropped to 73.45 dollars per barrel, from 74.54 dollars.
RUBBER: Rubber prices lost ground. "We saw profit-takings on the futures market in Tokyo," said Corrie MacColl trader Rashid Ahmed, adding that "the real reason (for price falls) appears to be better production conditions".
On TOCOM, Tokyo's commodity exchange, natural rubber for December delivery slid to 266.40 yen per kilogramme on Friday, from 279.20 yen a week earlier. Singapore's RSS 3 October contract slipped to 224 US cents per kilogramme on Friday, from 236 cents a week earlier.
COCOA: Cocoa prices held within tight ranges.
"Cocoa futures ended lower on the back of speculative selling, but remained in a narrow trading range," Sucden analyst Michael Davies said. On the Liffe, London's futures exchange, the price of cocoa for September delivery stood at 859 pounds per tonne on Friday, from 861 pounds a week earlier.
On the New York Board of Trade (NYBoT), the September contract firmed to 1,499 dollars per tonne on Friday, from 1,498 dollars a week earlier.
COFFEE: Coffee prices zoomed higher. "Coffee futures closed higher on speculative buying in addition to strong fundamentals" of supply and demand, said Sucden's Davies. "However, while crop conditions in Brazil remain favourable, we do not see much upside."
On Liffe, Robusta quality for September delivery jumped to 1,272 dollars per tonne on Friday, from 1,184 dollars a week earlier. On NYBoT, Arabica for September delivery leapt to 99.10 US cents per pound on Friday, from 94.90 cents.
SUGAR: Sugar prices dropped to six-week lows.
"New York raw sugar prices lost ground on the back of investment fund and speculative sales," Davies said. On Liffe, the price of a tonne of white sugar for October delivery decreased to 439.50 dollars, from 448 dollars a week earlier. On NYBot, the price of unrefined sugar for October delivery slid to 14.88 US cents per pound, from 15.34 cents.
GRAINS AND SOYA: Grains and soya prices mostly retreated in a market obsessed by the weather in major producer the United States.
Dry weather is predicted this weekend, which tends to support prices because it is deemed unfavourable for harvests. On the Chicago Board of Trade, the price of wheat for September delivery fell to 3.88 US dollars per bushel on Friday, from 4.07 dollars a week earlier.
Maize for September delivery rose to 2.54 dollars per bushel on Friday, from 2.36 dollars. August-dated soyabean meal - used in animal feed - declined to 5.76 dollars per tonne on Friday, from 5.83 dollars.
On the Liffe, the price of a tonne of wheat for November delivery decreased to 81 pounds on Friday, from 84 pounds.
COTTON: Cotton prices were mixed, finding limited support in dry weather which impacts on harvests in major producer the United States. Falling US exports also capped price gains. US export sales dropped by 31 percent in the week that ended July 20 compared with the previous week.
On the New York Cotton Exchange (NYCE), the December contract eased to 55.45 US cents per pound on Friday, from 55.46 a week earlier. The Cotton Outlook Index of physical cotton gained to 57.45 US cents on Thursday, from 56.40 US cents a week earlier.
WOOL: The wool market remained closed in leading producer Australia. Trading reopens on July 31. The Australian Eastern index had closed at 7.44 Australian dollars per kilo on July 13. The British Wooltops index stood at 403 pence on Thursday, from 406 pence the previous week.
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