Oil prices surged to record high points last week, fuelled by fears about tight supplies amid a worsening threat of disruption to Russian exports caused by the financial crisis at Yukos.
Gold prices fell to around six-week low leve1s hit by a stronger dollar. The Commodities Research Bureau's index of 17 commodities fell to 267.58 points on Friday from 269.28 a week earlier.
GOLD: Gold prices fell to their lowest level since mid-June early in the week, dragged down by a resurgent dollar, which rose to two-month high points against the yen and six-week highs against the euro. Gold prices won back some ground later in the week. A stronger dollar makes gold, which is priced in the US currency on world markets, less attractive to many buyers outside the United States.
The price of gold dropped on Tuesday to a morning fixing of 386.20 dollars per ounce on the London Bullion Market. It came after the dollar rose to the highest level for more than one month against the euro following a report showing US consumer confidence at a two-year high, increasing the likelihood of quicker moves to hike US interest rates.
"Gold has weakened because once again, there are increased expectations of US interest rates rising for the rest of the year, and that/s bad for gold," said analyst Matthew Turner at constancy group Virtual Metals.
"The fear is that gold's investment potential is worse when there are high interest rates and that funds may move into higher-earning assets," he added.
By Friday, gold prices stood at a fixing of 391.40 dollars per ounce on the London Bullion Market against 391.50 dollars a week earlier.
SILVER: Silver prices shrugged off gold's poor showing to climb modestly in the wake of strong performances from base metal.
"Rallying base metals may lead silver to move higher, looking beyond the short-term volatility," UBS analyst John Reade said.
Although considered a precious metal, silver is used mainly in industrial production, notably for photographic material and dentistry.
PLATINUM AND PALLADIUM: Platinum prices held steady, supported by news of production delays by South African group Anglo Platflum4 while palladium prices edged lower.
"The platinum price remains supported by the announcement by Anglo Platinum this week that the expansion projects were being delayed, because of the strong rand " Virtual Metals analyst Turner said.
"It means that the supply of platinum will be less, so that's giving strong support to prices. Palladium is still not doing much," he added. By Friday, platinum prices stood at 818 dollars per ounce on the London Platinum and Palladium Market, unchanged from a week earlier.
Palladium prices traded at 216 dollars per ounce against 220 dollars the previous week.
BASE METALS: Base metals prices received a boost as a result of labour disputes at various production sites, although the stronger dollar prevented any real surge. There is still a lot of attention focused on the labour disputes and the strikes in copper and aluminium," said analyst Andrew Cole of the Metal Bulletin Research journal.
"The aluminium strike in still ongoing at Becancourtin Canada and understand there are talks about Alcoa workers striking in sympathy with the people in Becancourt.
"For copper, the concerns have eased a little bit although the labour disputes (notably in Mexico) haven't all reached a resolution, "he added.
By Friday, three-month copper prices stood at 2,8.10 dollars per tonne in the London Metal Exchange from 2,710 dollars a week earlier. Three-month aluminium prices traded at 1 690.50 dollars per tonne against 1,663.
Three-month nickel prices eased to 13,705 dollars per tonne from 13 800 tree-month lead prices climbed to 895 dollars per tonne from 852.
Three-month tin prices lifted to 8,900 dollars per tonne from 8 540. Three-month zinc prices rose to 1 033.50 dollars per tonne from 978.
OIL: Oil prices rocketed to record high points on Friday as traders worried over the risk of disruption to exports from Russia amid the financial crisis engulfing oil giant Yukos, as producers struggled to keep up with demand.
The New York's reference contract, light sweet crude for delivery in September, reached a new al 1-time peak of 43.60 dollars per barrel in early deals.
London's Brent North Se crude oil for September delivery rose to 39.90 dollars per barrel in late trading, the highest level since October 1990, when it peaked at 40.95 dollars after Iraq's invasion of Kuwait ahead of the 1991 Gulf war.
"The New York price broke the previous record of 43.05 dollars set on Wednesday when Yukos, Russia's largest oil producers warned it could halt output within days because court bailiffs had ordered its subsidiaries to cease all operations that would affect the state of their assets.
Markets cooled on Thursday after official orders signed by a Russian justice ministry bailiff said that three of the group s key subsidiaries could continue sales and production.
But the reprieve was short-lived with prices shooting up again on Friday. The market is still nervous about Yukos and considers that delays in exports are inevitable," Commerzbank analyst David Thomas said.
And this is all happening during a period when inventories are still very tight and demand still very high. "I don't think there's been a time historically that I can recall when there's been such a supply constraint. even going back to the Iraq-Kuwait war in 1991.
And the issue this time around is that it' s been driven more by the strength of the demand rather than by the supply side."
Adjusted for inflation, world oil remain far below the levels reached in the 1970s oil shock.
By Friday, the price of benchmark Brent North Sea crude oil for September delivery stood at 39.68 dollars per barrel in late London trading against 38.05 dollars a week earlier.
In New York, the reference light sweet crude September contract rose to 43.35 dollars per barrel from 41.45 dollars a week earlier.
Rubber prices found a firmer 'footing after recent losses.
"The market was steadier, especially in Japan. Physical off take is quiet, nothing to get excited about," said one London trader.
In Osaka, the RSS 3 October contract stood at 140 cents on against 134.70 cents a week earlier. Singapore's RSS 3 October contract gained to 122 US cents from 120 cents the previous Friday.
COCOA: Cocoa prices continued their march higher as traders fretted over a lack of rain in leading producer Ivory Coast.
Cocoa futures rose to the highest level since August 2003 in New York and since January this year in London, where profit taking later set in.
On the CSCE, the New York futures market, the September contract advanced to 1,652 dollars per tonne on Friday from 1,630 dollars the previous week.
On LIFFE, London's futures exchange, 'the price of cocoa 'for September delivery stood at 942 pounds per tonne from 947 a week earlier. Coffee futures sank to an eight-month low in London and a six-month through in New York in the absence of any problems with the Brazilian harvest.
On LIFFE, Robusta quality for September delivery stood at 670 dollars per tonne on Friday, 'from 696 dollars a week earlier.
On New York's CSCE market, Arabica for September delivery slipped to 67.20 cents per pound from 70.75.
COTTON: Cotton futures slumped to the lowest level since. October 2002, pressured by good crop prospects in the United States and China. Prices fell to 44 cents per pound on Thursday, a level not seen since October 2002.
Continued supply/demand pressures have fortified a downtrend that some players see as going as low as 30.00 before its all over," commented Refco analyst Ann Prendergast. "Players are already talking about the excellent condition of the US crop in the south and west Texas, with some saying they have not seen a crop as good for as long they can remember.
"Further, there is talk that the Chinese crop will exceed expectations. China output could exceed 31 million bales."
New York's December contract dropped to 44.10 cents per pound on Friday from 47 cents a week earlier. The Cotton Outlook Index of physical cotton, fell to 55 cents on Thursday from 56.75 cents a week earlier.
GRAINS AND SOYA: US Grain and soya prices remained under pressure because of favourable weather in US growing regions analyst said. - -"-
Global grains production is set to rise by six percent in the 2004/05 harvest season from the previous one to 1.554 billion tones, according to revised estimates from the International Grains Council.
On LIFFE, wheat for November delivery rose to 67.75 pounds per tonne on Friday from 67.20 pounds a week earlier.
But in Chicago, the price of wheat for September delivery eased to 311 cents per bushel from 327.50 cents.
SUGAR: Sugar prices headed back up towards 'two-year highs set in mid-July amid worries about the risk of a supply shortfall.
"Markets fundamentals are seen as becoming increasingly bullish with expectations that demand will outpace supply in the 2004/05 season plus the fact that substantial imports are expected from countries like India, the worlds largest consumer of sugar," noted Sucden. By Friday on LIFFE, the price of a tonne of white sugar for October delivery stood at 249 dollars from 240 dollars a week earlier. On the CSCE in New York, a pound of unrefined, sugar for October delivery rose to 6.15 cents from 7.79 cents the previous week.
WOOL: There were no auctions in leading producer Australia, where sales resume on August 2.
The Australian Eastern index stood at 7.99 Australian dollars per kilo before the start of the break. The British Wooltops index was steady at 436 pence.
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