Precious and base metal prices retreated from recent multi-year peaks this week as the embattled dollar fought back.
"A 3.3 percent depreciation of the euro against the US dollar since the peak five days ago has sparked aggressive profit taking across the commodity markets," Barclays Capital analysts noted on Friday.
"Gold, understandably given its close correlation with the euro in this rally, has suffered the most with a fall of four percent this week and with further weakness expected.
"Base metals have also suffered, falling 3.4 percent on the week," they told clients.
Oil prices shot up to new post-Iraq war highs at the start of the week as traders fretted about a quarter-century low in commercial oil stocks in the United States as an icy blast hit the north-east of the country.
GOLD: Gold's inverse relationship with the dollar saw the precious metal skid lower as the US currency rebounded, particularly against the euro.
By Friday afternoon, gold prices stood at 408.40 dollars an ounce on the London Bullion Market against 423.35 dollars a week earlier.
The metal failed to return to a high point of 428 dollars reached in the early part of the previous week.
Gold slipped back in tandem with the single European currency as several eurozone monetary officials and political leaders expressed concern about the pace of the currency's recent rise.
The greenback's rebound reversed some of the positive influence of its recent slide on gold, which has prompted a flight to hard assets and made gold traded in dollars more affordable to buyers using other currencies.
"The euro/dollar will remain key to determining short-term direction over the coming sessions with a test back to 400 dollars looking very likely at the moment," said James Moore, analyst at the specialist website TheBullionDesk.com.
But the fall might not last long, suggested research group GFMS, which said in a report that gold prices might even smash through the 450-dollar barrier in the first half of this year.
SILVER: Silver was pulled back from near-six year highs in the wake of gold.
After exceeding six dollars an ounce the previous week for the first time since May 1998, silver hit a new peak of 6.65 dollars per ounce on Monday of this week, boosted by the falling dollar and improved demand prospects.
But the metal saw the gains fade as the US currency battled back.
"As with gold, silver has seen further weakness today on the back of dollar strength," said Moore.
The silver price stood at 6.205 dollars per ounce on the London Bullion Market on Friday against 6.245 dollars a week earlier.
PLATINUM AND PALLADIUM: Platinum and palladium were the most resilient of the precious metals in the face of the rebounding dollar.
Platinum prices bolted up to new levels not seen for 24 years on Tuesday, reaching 868 dollars per ounce on a wave of speculative buying.
The metal frittered away some of its gains later in the week after traders opted to take profits in response to a rise in the US dollar and a corresponding fall in the value of the South African rand.
Analysts say the rand's recent rise has prompted mining firms in South Africa to scale back investment in new output.
"The commodity fundamentals of the platinum market are easily the most constructive of the precious metals and, notwithstanding the occasional bout of profit-taking, we expect prices to continue to challenge record fresh multi-year peaks," wrote Barclays Capital analyst Ingrid Sternby.
Even palladium, which has endured a brutal slump from over giddy heights above 1,000 dollars per ounce just a few years ago, was coming back in favour.
"Speculators desperately searching for a commodity to buy at sub-peak levels see palladium as having completed a fall from 1,100 dollars to 150 dollars, trading at a record discount to platinum and as having barely reacted to the commodity bull market," explained Sternby.
By Friday, the platinum price stood at 850 dollars per ounce on the London Platinum and Palladium Market against 851 dollars a week earlier.
Palladium traded at 214 dollars an ounce from 201 dollars.
BASE METALS: The resurgent dollar also took its toll on the base metals complex with profit-taking setting in.
"There's a cautiousness creeping into the market," said Robin Bhar, metals analyst at Standard Bank.
Given the high levels metals have been trading at recently, the market was ripe for profit taking.
"It's just a bit of a shakeout," Bhar said, adding that the selling was unlikely to be sustained.
By Friday, three-month copper prices eased to 2,382.5 dollars per tonne on the London Metal Exchange from 2,414 a week earlier.
Three-month aluminium prices actually firmed slightly to 1,625.5 dollars per tonne from 1,616.5.
Three-month nickel prices lost to 14,600 dollars per tonne from 16,350.
Three-month zinc prices edged down to 1,022 dollars per tonne from 1,040.
Three-month tin prices wilted to 6,410 dollars per tonne from 6,545. Three-month lead prices declined to 731 dollars per tonne from 743.
OIL: Oil prices started the week where they left off, rising to a new post-Iraq war high on worries about low commercial stocks and cold weather in the United States.
But prices later lost some ground, particularly in New York, after reports of rising stocks of distillate fuels including heating oil, coupled with estimates of ample natural gas supplies, analysts said.
By Friday, the price of benchmark Brent North Sea crude oil for March delivery stood at 29.52 dollars a barrel in London from 30.96 dollars a week before.
In New York, the reference light sweet crude February contract was at 33.70 dollars against 34.62 a week earlier.
By Friday, eastern Canada and the north-eastern United States were gripped by Arctic conditions, as the US National Meteorological Service issued an alert for the states of New York, New Jersey, Maine and Connecticut.
The cold snap added to worries about low oil inventories in the industrialised world.
On Wednesday the US Department of Energy reported a drop of five million barrels in stocks of crude oil during the week ended January 9, leaving inventories 33.7 million barrels lower than a five-year average for the time of year.
But the impact was offset somewhat by a rise in inventories of distillates - heating oil and diesel fuel - of 2.8 million barrels to 138.3 million.
The International Energy Agency estimated Friday that inventories of oil in industrialised countries amounted to 51 days of consumption at the end of November.
RUBBER: Rubber prices remained static for yet another week as the market, which had yet to properly shake off a post-Christmas torpor, prepared for the Lunar New Year holiday from January 22 to 24.
In Kuala Lumpur, the RSS 1 index was unchanged at 4.725 ringgit per kilo on Thursday from a week earlier.
COCOA: Cocoa futures slipped slightly as more crops arrived at ports in insurgency-hit leading producer Ivory Coast and investment funds stayed largely away from the market.
"Strength in the dollar contributed to the opening weakness," said analyst Ann Prendergast from the Refco brokerage.
"Firmer arrivals in Ivory Coast tempered expectations of a diminished 2003/4 harvest and the conspicuous absence of fund participation left the directional impetus of the market unclear," she said.
On LIFFE, the price of cocoa for March delivery slipped to 907 pounds a tonne on Thursday from 918 pounds a week before.
On the CSCE, the New York futures market, the March contract edged down to 1,605 dollars per tonne from 1,611 dollars.
COFFEE: Coffee hit four-month bests as investment funds snapped up supplies amid growing concern about the prospect of limited harvests ahead.
"Supply has consistently been reported to be tightening, with a cyclically smaller 2002/3 crop falling alongside a much smaller than expected counter cyclical crop in 2004/5," said Recfo's Prendergast.
On LIFFE, Robusta quality for March delivery appreciated to 780 dollars per tonne on Thursday, from 749 dollars a week earlier.
On New York's CSCE market, Arabica for March delivery crept up to 69.55 cents a pound on Thursday from 68.35 cents.
SUGAR: Sugar futures levelled off as the market struggled with a surfeit of supply and uncertain purchasing.
"Traders have been focused on China as a potential avenue of fresh buying, but as each new day disappoints, the downside pressure builds," said Refco's Prendergast.
On LIFFE, the price of a tonne of white sugar for March delivery inched up marginally to 186 dollars on Thursday from 185.80 dollars the previous week.
On the CSCE in New York, a pound of unrefined sugar for March delivery edged back to 5.73 cents on Thursday from 5.76 cents.
GRAINS AND SOYA: Wheat slipped back over the week, while maize and soya gained following the publication of a US Department of Agriculture report.
Issued on Monday, it sent soya and maize prices strongly upwards after giving reduced forecasts for US production at a time of low stockpiles and strong demand, especially from China.
However wheat prices suffered from favourable crop growing conditions in South America and a fall in US exports over the previous week.
In Chicago, the price of wheat for March delivery slipped to 386.25 cents a bushel on Thursday from 394 cents a week earlier.
On LIFFE, wheat for January edged down to 104 pounds a tonne from 106.75 pounds.
In Chicago maize for March delivery gained to 268.75 cents a bushel from 251.75 cents.
Soyabeans for March delivery rose to 835 cents a bushel from 797.50.
January-dated soyabean meal - used in animal feed - appreciated to 257.70 dollars per tonne from 241.30 dollars.
COTTON: Cotton prices gave up some ground as the upcoming Lunar New Year holiday kept Chinese buyers from the market and speculative funds started selling.
"The market sold off on technical weaknesses and a lack of Chinese purchases," said Refco's Prendergast.
"A lack of fresh news is putting a damper on prices. With little reason to support price above current levels, speculators have sold into the market."
New York's March contract edged down to 74.49 cents a pound on Thursday from 75.13 pounds a week earlier.
The Cotton Outlook Index of physical cotton, the average of the world's lowest prices, slipped to 73.10 cents from 76.25 cents.
WOOL: Wool prices gained ground on strong demand and a reduction in the value of the Australian dollar against its US equivalent, which made wool more affordable for overseas purchasers. "Competition in the sale rooms was again strong, with active support from a wide cross section of the trade including China and Europe," the Australian Wool Industries Secretariat said in its weekly market round-up.
The Australian Eastern index gained to 8.27 Australian dollars per kilo on Thursday from 7.91 dollars the previous week.
The British Wooltops index edged up to 476 pence from 473 pence.
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