Oil prices fell last week amid forecasts of slowing demand that were offset slightly by further drops of US stockpiles triggered by Hurricane Katrina.
The gold prices, however, hit their highest levels in 17 years in London and New York, owing to forecasts of higher inflation. Other precious metals like platinum and silver followed in its wake. However, base metals mostly weakened. Coffee and cocoa lost ground but sugar enjoyed a surge.
The Commodities Research Bureau's index of 17 commodities fell to 317.93 points on Friday from 324.77 points the previous week. It had hit 337.18 points on September 2, its highest level since November 1980.
GOLD: Gold prices hit their highest levels in 17 years in London and New York, as high oil prices stoked inflation fears.
On the London Bullion Market, the price of gold rose to 459 dollars an ounce, its highest since June 1988 and beating its previous peak in early December, which was 456.75 dollars.
On the Comex, a division of the New York Mercantile Exchange, gold for December delivery rose Friday morning to 462.70 dollars per ounce, also its highest level since June 1988.
"Anti-inflationary hedging and technical buying have combined to push gold to a new 17-year high this morning," said James Moore, analyst with the specialist publication The Bullion Desk.
The metals consultancy GFMS predicted Wednesday that the price of gold would hit 480 dollars an ounce by the end of the year as demand reached a four-year high, particularly in India and the jewellery sector.
A weaker dollar traditionally makes gold, which is priced in the US currency on world markets, more attractive to buyers using other currencies.
On the London Bullion Market, gold prices climbed to 457.20 dollars per ounce at the late fixing on Friday from 448.25 dollars the previous week.
SILVER: Silver prices edged up this week on the coattails of gold prices, but hit a ceiling of 7.10 dollars per ounce.
Yingxi Yu, analyst at Barclays Capital said: "Silver is sitting comfortably in a narrow range above seven dollars this morning, with resistance at 7.10 dollars still looking heavy."
James Moore, an analyst with The Bullion Desk specialist publication, said: "Gold's break this morning may give silver the legs to clear the resistance band at 7.08/7.06 dollars."
"However, consolidation within (copper and) the base complex could weigh on the more industrial silver," he said.
On the London Bullion Market, silver prices rose to 7.08 dollars per ounce at the late fixing Friday from 6.985 dollars the previous week.
PLATINUM AND PALLADIUM: Platinum prices followed in the upward footsteps of silver and gold, hitting a near-18 month peak, while palladium hit its highest level in about one month.
Yu said platinum hit resistance at about 920 dollars per ounce, with profit taking on several markets breaking its rise.
Despite a slow start, palladium rose higher at the end of the week, like other precious metals.
On the London Platinum and Palladium Market (LPPM), an ounce of platinum was traded for 918 dollars per ounce at the late fixing Friday, from 909 dollars the previous week and the highest level since April 20, 2004.
Palladium meanwhile was valued at 187 dollars, up from 183 dollars.
BASE METALS: Base metals prices dropped further this week, though copper and zinc held their ground.
William Adams, an analyst with BaseMetals.com, said the "market has got used to relying on steady fund buying to provide underlying support, but this solid base seems to be crumbling at the edges."
Factors were fears of an economic slowdown and news that New Orleans stocks were intact despite the hurricane.
Tin, which is not usually prone to speculation, was the first to hit its lowest level of the year on Thursday, Adams said.
By Friday, three-month copper prices on the London Metal Exchange (LME) stood unchanged from the previous week at 3,548 dollars per tonne.
Three-month aluminium prices declined to 1,827 dollars per tonne from 1,839.50 dollars.
Three-month nickel prices slid to 13,375 dollars per tonne from 14,500 dollars.
Three-month lead prices decreased to 855 dollars per tonne Friday from 864 dollars. Three-month zinc prices edged up slightly to 1,368 dollars per tonne from 1,367 dollars.
Three-month tin prices recoiled to 6,425 dollars per tonne from 6,850 dollars.
OIL: Oil prices continued their retreat this week amid signs of easing world demand, which was offset slightly by a new drop in US crude stockpiles.
"The main worry now is about demand and also high prices have put a strain on consumers' budgets," said David Thurtell, a commodity analyst with the Commonwealth Bank of Australia in Sydney.
The 11-member Organisation of Petroleum Exporting Countries (OPEC) said Thursday in its monthly report that oil demand in 2005 would likely rise by an annual 1.7 percent to 83.5 million barrels per day.
This was down from the oil cartel's previous prediction in August of a 1.9 percent gain.
The oil cartel also cut its forecast for 2006, saying it now expected demand to increase by 1.8 percent.
However, the slide in prices was limited by Wednesday's announcement that US crude inventories dropped by 6.6 million barrels to 308.4 million in the week ending September 9, because of damage caused by Hurricane Katrina. Analysts had expected a drop of 2.0 million barrels.
Despite signs that high prices have dampened demand, the market remained anxious about supplies, particularly since refineries were struggling to turn crude into heating fuel in time for the northern hemisphere winter.
Meanwhile, the market was awaiting the Opec meeting next Monday and Tuesday in Vienna, which analysts predicted would result in a raise of the cartel's output ceiling by 500,000 barrels to 28.5 million barrels per day, its highest level since 1987.
The barrel of Brent North Sea crude for delivery in October settled late Friday at 62.75 dollars, compared to 64.04 dollars the previous week.
In New York, the barrel of crude for delivery in October dropped to 64 dollars from 65 dollars.
RUBBER: Rubber prices weakened slightly this week, but a rebound is expected in the coming weeks amid weather-induced curbs on production.
Rachid Ahmed, a trader at Corrie Maccoll, forecast higher prices with the October onset of the rainy season in Asian producer nations Malaysia, Indonesia and Thailand, where farmers have difficulty collecting the latex.
On TOCOM, Tokyo's commodity exchange, natural rubber for October delivery settled at 184 yen on Friday, from 188 yen a week earlier.
Singapore's RSS 3 October contract edged downward to 170 US cents on Friday, from 172.25 cents.
COCOA: Cocoa prices plummeted this week, losing 11 percent of their value. "Speculators who had run the market up on short-covering based on unease in Ivory Coast vacated those positions in response to technical weakness and a positive outlook for the 2005-2006 crop," Refco analyst Ann Prendergast said.
Prendergast did not rule out the price dropping to 1,370 dollars in the short term.
On the Liffe, London's futures exchange, the price of cocoa for December delivery stood at 817 pounds sterling, down from 880 pounds a week earlier.
On the New York Board of Trade (NYBoT), the December contract fell sharply to 1,395 dollars per tonne on Friday from 1,540 dollars.
COFFEE: The price of coffee plunged this week to its lowest level in nearly a year in New York as output looked better in the main producing countries Brazil and Vietnam.
Coffee prices sank to 91.40 cents a pound on Thursday in New York, its lowest level since November last year. On Tuesday it fell to 903 dollars per tonne in London, its lowest point since March.
The market reacted to the International Coffee Organisation's report Thursday that raised the world-wide production forecast by two million 60-kilogram bags to 108 million bags for 2005/2006. On the Liffe, Robusta quality for November delivery slumped Friday to 882 dollars per tonne from 962 dollars a week earlier.
On the NYBoT, Arabica for December delivery dropped to 90.40 cents per pound from 96.45 cents.
SUGAR: Sugar prices rallied in New York to their highest level in four and a half years, as Brazilian ethanol looked attractive in the face of high gasoline prices.
"The market looks set to push higher again on continued belief that Brazil is set to divert more cane into ethanol production because of the sky-high crude prices," Sucden analyst Michael Davies said.
Ethanol can be used in some cars instead of gasoline.
"Iran will import 100,000 tonnes more sugar than expected in the year to March after cold weather slashed the cane crop," he said. "Iran is a major sugar importer and has already planned to import 352,000 tonnes in the year to March 2006," he said.
By Friday on Liffe, the price of a tonne of white sugar for December delivery stood at 298 dollars, from 303.90 dollars a week earlier.
On the NYBot, the price of unrefined sugar for October delivery rose to 10.52 US cents on Friday from 10.07 cents a week before.
GRAINS AND SOYA: Maize and soya prices weakened this weak on forecasts of good harvests, but wheat prices strengthened after US wheat stockpiles for 2005-2006 were revised downward.
However, wheat price gains were reduced on profit taking and AG Edwards analyst Victor Lespinasse predicted wheat would continue to weaken.
On the Liffe, the price of a tonne of wheat for November delivery stood at 67.10 pounds sterling late Friday, from 67 pounds a week earlier.
On the Chicago Board of Trade, the price of wheat for December delivery (new contract) settled at 324.75 US cents per bushel on Friday, from 325.75 cents.
Maize for December delivery (new contract) fell to 206 cents per bushel Friday from 216 cents.
Soyabeans for November delivery (new contract) fell to 572 cents per bushel on Friday from 590 cents October-dated (new contract) soyabean meal - used in animal feed - fell to 173.90 dollars per tonne from 181.70 dollars.
COTTON: Cotton prices fell this week following disappointing US export figures and forecasts of overproduction.
"Poor exports sales weighed on prices," Prendergast said. "The large US and world crop are making it difficult to argue for higher prices, especially with ending stocks projected to grow".
On the New York Cotton Exchange (NYCE), the December contract stood at 50 US cents per pound on Thursday, down from 52.01 cents a week earlier. The Cotton Outlook Index of physical cotton fell to 53.95 cents on Thursday from 55.8 cents last week.
WOOL: Wool prices firmed in Australia this week but stayed near their lowest levels in nearly four years.
The Australian Eastern index edged up to 6.81 Australian dollars per kilo on Thursday from 6.78 AUD last week.
The British Wooltops index dropped to 396 pence Thursday from 402 pence last week.
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