Gold prices rebounded above 1,000 dollars last week and base metals futures mostly fell as economic recovery hopes stalled, traders said. World oil prices won support on heightened tensions between major crude exporter Iran and the West. Among soft commodities, sugar struck a 28-year high and cocoa hit a peak last seen in 1985 on worries over tight supplies.
The global economy is on unsteady legs, the World Bank warned on Friday, saying that 2010 would be "a highly uncertain economic year" as other signals took the gloss off talk of a quick recovery. Also Friday, official data showed US job losses accelerated to 263,000 in September and the unemployment rate rose to 9.8 percent, a fresh 26-year high.
"The dire unemployment numbers saw risk assets get dumped - equities, precious metals, oil - and money pile into cash - dollars - and also the dollar-denominated bond market," said GFT Global Markets analyst David Morrison.
OIL: Crude oil prices dived Friday on news of unexpectedly high job losses and a rising unemployment rate in the United States, which is the world's biggest energy consuming nation. However, the oil market won some ground over the course of the week as global stock markets completed the third quarter with impressive gains.
London's FTSE 100 index had surged by a record-breaking 21 percent during the third quarter, which ended on Wednesday, as investors were comforted by hopes of a global economic recovery. And New York's Dow Jones Industrial Average finished the third quarter with a 15-percent gain - its best quarter since 1998.
But on Friday, the dire US jobs report doused hopes of a swift economic recovery in the United States, which is the top global energy consuming country followed by number two China. The oil market also won modest support this week from geopolitical jitters over key crude producer Iran. On Monday, Iran test-fired long-range missiles that it says could reach targets inside Israel. The United States said the missile tests were "provocative".
But crude futures dipped on Thursday after talks between Iran and world powers over Tehran's sensitive nuclear programme. US President Barack Obama conceded the meeting between world powers and Tehran in Geneva, which included the highest-level direct talks between the United States and Iran in three decades, was a "constructive" start to defusing a nuclear stand-off.
He also warned that Washington was ready to quickly clamp "increased pressure" on Tehran, an apparent code word for sanctions, if it sought to promote endless talks on its nuclear program simply as a delaying tactic. Western powers suspect the programme is aimed at making atomic weapons, a charge which Iran denies.
Analysts have said that heightened tensions between the Islamic republic and the West threaten to disrupt oil exports through the Strait of Hormuz near Iran. Some 25 percent of the world's crude supplies flow through the strait. Iran produces around 3.8 million barrels of crude oil per day and is the third biggest global oil exporter after Russia and Saudi Arabia.
By Friday on London's InterContinental Exchange (ICE), Brent North Sea crude for delivery in November rose to 67.93 dollars a barrel from 65.38 dollars a week earlier. On the New York Mercantile Exchange (NYMEX), light sweet crude for November firmed to 69.77 dollars from 66.62 dollars a week earlier.
PRECIOUS METALS: Gold prices bounced back above 1,000 dollars thanks to its status as a safe-haven investment in times of economic uncertainty. Gold is regarded as a safe bet for investors to guard against inflation, which is of growing concern following trillions of dollars in borrowing by governments and radical measures including the printing of new money.
"Despite gold's reputation as a safe-haven asset, we believe that the metal is particularly vulnerable to a sell-off in equities and other risk assets at the moment," said UBS analyst John Reade. Gold last month struck 1,024.28 dollars an ounce, the highest level since March 2008 when it had hit a record high of 1,032.70 dollars.
By late Friday on the London Bullion Market, gold rose to 1,003.50 dollars an ounce from 991.50 dollars a week earlier. Silver edged up to 16.21 dollars an ounce from 16.20 dollars. On the London Platinum and Palladium Market, platinum fell to 1,269 dollars an ounce at the late fixing on Friday from 1,330 dollars. Palladium dipped to 292 dollars an ounce from 299 dollars.
BASE METALS: Base metals prices mostly retreated. "Recent gains reversed as flow of economic data fails to provide persuasive evidence of where we are in the recovery cycle," said Barclays Capital analyst Gayle Berry.
By Friday on the London Metal Exchange, copper for delivery in three months fell to 5,853 dollars a tonne from 5,928 dollars a week earlier.
-- Three-month aluminium slipped to 1,812 dollars a tonne from 1,832 dollars.
-- Three-month lead dropped to 2,100 dollars a tonne from 2,198 dollars.
-- Three-month tin slid to 14,175 dollars a tonne from 14,400 dollars.
-- Three-month zinc dipped to 1,871 dollars a tonne from 1,880 dollars.
-- Three-month nickel rose to 17,125 dollars a tonne from 16,876 dollars.
COCOA: Cocoa prices hit the highest level for 24 years by reaching 2,090 pounds a tonne on expectations of lower output in leading producer Ivory Coast.
Prices later fell on profit-taking. "At the start of the 2009/10 official cocoa (harvest) season, the market is fraught with speculation on whether there will be another deficit," said Macquarie analyst Kona Haque.
By Friday on Liffe, London's futures exchange, the price of cocoa for delivery in December dropped to 1,998 pounds a tonne from 2,035 pounds a week earlier. On the New York Board of Trade (NYBOT), the December cocoa contract slid to 2,993 dollars a tonne from 3,079 dollars.
SUGAR: Sugar futures struck 28-year highs by reaching 640.50 pounds a tonne. "The current Indian 2009-10 crop has suffered at the hands of another very poor Monsoon season - the worst for several decades - which has contributed, as with the previous year, to a continuous stream of reduced output estimates," said Barclays Capital analyst Nicholas Snowdon.
By Friday on Liffe, the price of a tonne of white sugar for delivery in December rallied to 614 pounds from 577 pounds a week earlier. On NYBOT, the price of unrefined sugar for March advanced to 24.06 US cents a pound from 21.78 cents.
GRAINS AND SOYA: Maize and wheat prices rose, while soya futures fell. By Friday on the Chicago Board of Trade, maize for delivery in December rose to 3.37 dollars a bushel from 3.34 dollars a week earlier. November-dated soyabean meal - used in animal feed - fell to 9.03 dollars from 9.26 dollars. Wheat for December climbed to 4.53 dollars a bushel from 4.49 dollars.
COFFEE: Coffee futures were little changed. By Friday on Liffe, Robusta for delivery in November dipped to 1,401 dollars a tonne from 1,404 dollars a week earlier. On the NYBOT, Arabica for December edged higher to 131 US cents a pound from 129 cents.
RUBBER: Malaysian rubber prices rose this week amid tight supplies caused by erratic weather, dealers said, adding that expectations of steady demand from China provided extra support. On Friday, the Malaysian Rubber Board's benchmark SMR20 climbed to 211.15 US cents a kilo from 208.30 cents last week.
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