World oil prices nose-dived last week as speculators bailed out of the market on news of rising US petroleum stockpiles. Gold hit 16-year highs and silver eight-month peaks as the dollar continued on its losing streak. The Commodities Research Bureau's index of 17 commodities fell to 284.05 points on Friday from 291.84 a week earlier.
GOLD: Gold prices scaled fresh 16-year peaks as the dollar remained under pressure across the board, but the precious metal finished the week little changed after traders opted to take profits.
Gold prices rose to 456.75 dollars an ounce on the spot market on Thursday, the highest level since June 1988. It reached 454.35 dollars at the fixing.
The precious metal hit new highs as the dollar sank to new all-time lows against the euro and to the lowest level for almost five years against the yen on concerns about the US current account and budget deficits.
Since mid-October the euro has risen by over nine percent against the dollar while the price of gold has increased by 11 percent.
A weaker dollar makes gold, which is priced in the US currency on world markets, more attractive to buyers using other currencies. Gold is also seen as a good hedge against fluctuations in the value of the dollar.
But prices backtracked late in the week as the dollar paused for breath.
"Profit taking hit the metals... as the dollar staged a modest recovery," explained James Moore, analyst at TheBullionDesk.com specialist website.
"Downward pressure in oil and a strong correction by the dollar... triggering selling from a number of sources, including fund."
But with the dollar likely to remain under pressure, analysts said gold prices could scale new peaks in the near future.
"Generally the underlying trend in gold remains positive, but clearly short-term direction shall continue to be dictated by the dollar," said Barclays Capital analyst Kamal Naqvi.
On the London Bullion Market gold prices stood at 448.65 dollars per ounce at the fixing late on Friday, from 451 dollars a week earlier.
SILVER: Silver prices hurdled the eight-dollar mark for the first time since April, approaching 17-year highs.
"Silver has suddenly burst into life," noted Naqvi, after the spot price hit 8.17 dollars, rising towards April's high of 8.43 dollars.
"The move was reportedly triggered by one large speculative buyer which in turn triggered stop-loss buying. Silver has underperformed gold in recent week and this latest move may be seen as catch-up," he said.
"However, we would continue to highlight that speculative length in silver is far more concentrated than in gold and this means that the impact of profit taking is more consequential should it occur."
The spot price of silver shot to as high as 7.78 dollars an ounce on Friday, the highest level since April 13.
Silver prices stood at 7.83 dollars per ounce on Friday at the fixing against 7.67 a week earlier.
PLATINUM AND PALLADIUM: Platinum prices rose on the back of a weaker dollar, while sentiment towards palladium remained depressed.
Platinum prices reached 884 dollar a tonne on Wednesday, the highest level since August 16.
"The platinum group metals continue to follow their divergent paths with platinum benefiting from the weak US dollar but palladium being largely ignored, although trading activity in both metals is reportedly modest," said Naqvi.
"Platinum is pushing above 870 dollars boosted by the push of the South African rand below 5.70 (further threatening the South African mine expansions) and the Japanese yen below 102 (encouraging speculative interest) with the current momentum suggesting near-term targets of 880 dollars and then 900 dollars are clearly in focus," he added.
A strong yen encourages Japanese car makers to buy dollar-priced platinum, while a strengthened rand discourages supply activity in major producer South Africa.
By Friday, platinum prices stood at 870 dollars per ounce on the London Platinum and Palladium Market, against 863 dollars a week earlier.
Palladium prices dipped to 208 dollars per ounce compared with 214 dollars the previous week.
BASE METALS: Base metal prices ended the week weaker as markets took direction from oil prices and the dollar.
"The base metals were encouraged by the sharp fall in the oil price on Wednesday because high oil prices threatened the global economy and an economic growth, so in the long term it is good for base metals to have a low oil price," said Andrew Cole, analyst at Metal Bulletin Research.
"But when the dollar rebounded on Thursday, people took it as a cue to act... and to cash in their profits."
"As the end of the year comes by there is usually a tendency for the speculators to lock in their profits and not to open new positions. So I suppose that the new highs that we are looking for - because supply is really tight - won't be achieved before the first quarter of next year."
By Friday, three-month copper prices slid to 2,981 dollars per tonne on the London Metal Exchange against 3,084 dollars a week earlier.
Three-month aluminium prices fell to 1,800 dollars per tonne from 1,838.
Three-month nickel prices declined to 12,900 dollars per tonne from 14,200. Three-month lead prices dipped to 941 dollars per tonne from 951.
Three-month zinc prices fell to 1,157 dollars per tonne from 1,135.
Three-month tin prices were steady at 8,835 dollars per tonne.
OIL: News of rising US petroleum inventories sent oil prices tumbling as speculators bailed out of the market.
Prices plunged by 12 percent in just two days on Wednesday and Thursday on the improved supply outlook.
The rout was sparked by a US government report showing that commercial crude oil inventories climbed 900,000 barrels to 293.3 million in the week to November 26, about average for this point of the season.
Distillates - mostly heating oil and diesel - soared 2.3 million barrels to 117.9 million, twice the increase predicted by analysts, although stocks remained below average for the season, the US Energy Department said.
Heating oil inventories rose 1.0 million barrels to 49.9 million. Diesel stocks rose 1.4 million to 66.2 million.
Prices were also pressured by signs that ministers of the OPEC oil cartel are unlikely to agree to cut output in the first quarter when they meet in Cairo on December 10.
"We continue to have a fund liquidation all across the board in crude oil, heating oil, gasoline. That is really what is at the heart of the matter here," said Refco market analyst Marshall Steeves.
"I think until we see some cold weather... we will see ongoing weakness here."
By Friday New York's light sweet crude for delivery in January stood at 42.60 dollars per barrel on Wednesday against 49.44 the previous Friday.
In London, Brent North Sea crude for January delivery was quoted at 39.50 dollars per barrel from 44.95 a week earlier.
RUBBER: Rubber prices rallied this week because of technical factors, although prices remained pressured amid peak levels of production in Asia.
"Prices have rebounded," said one London trader.
"Many players are feeling that the market is oversold."
The trader added: "There has been good raw material supply, we've moved into peak production in the producing areas."
In Osaka, the RSS 3 January contract rose to 126.00 US cents on Friday from 121.80 a week earlier.
Singapore's RSS 3 January contract firmed to 119.00 cents from 118.00 the previous Friday.
COCOA: Cocoa futures rose, even with the market having adequately priced in the possibility of worsening violence in Ivory Coast, the world's leading producer, analysts said.
"Sentiment is that an adequate war premium has been built into the market," Refco analyst Ann Prendergast said.
On the CSCE, the New York futures market, the March contract climbed to 1,669 dollars per tonne on Friday, from 1,600 the previous Wednesday, when the market closed ahead of the Thanksgiving holiday in the United States.
COFFEE: Coffee prices surged, notably in New York where they broke above one dollar for the first time in four years on speculative buying and concerns over the quality of harvest produce in leading producer Brazil.
New York prices jumped to as high as 1.025 dollars per pound on Thursday, the highest level since July 2000 and have now risen by 38 percent in one month.
In London, prices climbed to 790 dollars per tonne, the highest peak since June.
On New York's CSCE market, Arabica for March delivery stood at 96.60 cents per pound on Friday, from 91.95 the previous Wednesday.
COTTON: Cotton futures rose on buying from speculative funds, though remained pressured by an abundance of supply and disappointing US export levels.
"Export sales came within the range of expectations but failed to give the market the support it needed to head higher," Prendergast said.
"Bearish fundamentals will continue to apply pressure on the market."
US cotton export sales stood at 143,100 bales in the week to November 25, down four percent from the previous week but up 17 percent on the previous four-week average, the US Department of Agriculture reported.
New York's March contract advanced to 43.20 cents per pound on Friday from 42.92 a week earlier.
The Cotton Outlook Index of physical cotton stood at to 48.85 cents on Thursday from 48.90 the previous week.
GRAINS AND SOYA: Grains and soya prices suffered at the hands of meteorological factors and huge harvests. "It's the seasonal weakness we have to endure," Allendale analyst Joe Victor said.
Soya futures fell to the lowest level since August 2003, maize - or corn - hit the steepest trough since April 2002 and wheat since January 2003. "Historically the corn market drifts lower towards Christmas," Victor said.
"Wheat is just a disaster. It's primarily technically related. This market is technically oversold and needs very badly a technical correction higher," he added.
On Liffe, wheat for January delivery fell to 65.50 pounds per tonne on Friday from 67.50 pounds the previous week.
In Chicago, the price of wheat for December delivery dropped to 289.00 cents per bushel from 298.00.
Maize for December delivery declined to 194.00 cents per bushel from 199.00.
Soyabeans for January delivery retreated to 521.50 cents per bushel from 554.00.
December-dated soyabean meal - used in animal feed - was worth 153.20 dollars per tonne compared to 160.70 a week earlier.
SUGAR: Sugar futures eased lower after rising to the highest level for three years in London, thanks to buying from speculative funds and strong demand, notably the Middle East.
Sugar futures climbed to 258 dollar per tonne on Thursday, the highest peak since January 2002, before cooling.
"Physical interest from the Middle East has picked up recently with the end of Ramadan," Refco's Prendergast said.
"Iran's 40,000-tonne purchase lent the market stability."
By Friday on Liffe, the price of a tonne of white sugar for March delivery stood at 255.60 dollars from 256.80 a week earlier.
On the CSCE in New York, a pound of unrefined sugar for March delivery dipped to 8.85 cents from 8.97 the previous Wednesday.
WOOL: Wool prices in leading producer Australia climbed after the Australian dollar fell unexpectedly against its US counterpart.
"After falls of 3.3 percent over the previous two sales (weeks), the Australian Wool Market finished this week with prices 0.9 percent higher on average," the Australian Wool Industries Secretariat said.
The Australian dollar fell by 0.8 percent against the US unit this week, to 78.05 US cents, making wool exports cheaper for overseas buyers.
The Australian Eastern index rose to 7.24 Australian dollars per kilo from 7.19 a week earlier.
The British Wooltops index fell to 397 pence from 407 pence.
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