Gold forged yet another record high this week, as investors sought safety, but most commodity markets plunged on concern that eurozone and US economic woes could spark another fierce global recession. "The vagaries of macroeconomic data and fickle sentiment towards risk remain the overriding drivers of commodity prices," said Barclays Capital analyst Sudakshina Unnikrishnan.
"Concerns about global growth prospects, coupled with sovereign debt issues in Europe and the US, and fears of a slowdown in emerging markets have left the market with little time to digest anything else. "A beneficiary of the ongoing macro uncertainty has been gold, with prices hitting another all-time high this week."
Global stock markets tumbled on the increasing prospect of a sharp economic downturn, as a result of the worsening eurozone debt crisis, the flagging US economy and questions over the strength of Asian demand. In Europe, markets remains plagued by worries that debt-laden Italy and Spain could be engulfed by the fast-moving eurozone debt crisis. The two countries have experienced a surge in borrowing costs in recent days. The crisis shifted up a gear when the head of the European Commission Jose Manuel Barroso admitted that debt contagion has now spread beyond the eurozone's peripheral nations.
PRECIOUS METALS: With most other commodities reeling, gold was the star performer once again, as investors sought the traditional safe-haven precious metal amid the worsening outlook.
"Gold prices have continued to remain underpinned ... as investors continue to fret about sovereign and growth risks," said CMC Markets analyst Michael Hewson. The metal, whose twin drivers are investment and jewellery demand, hit an all-time peak of $1,681.72 an ounce on Thursday.
And among other precious metals, silver reached a three-month high at $42.23 an ounce, before easing on profit-taking. Palladium struck a five-month peak at $849 an ounce. By late Friday on the London Bullion Market, gold jumped to $1,658.75 an ounce from $1,628.50 the previous week. Silver eased to $39.24 an ounce from $39.63. On the London Platinum and Palladium Market, platinum dropped to $1,709 an ounce from $1,779.
Palladium decreased to $742 an ounce from $824.
BASE METALS: Base or industrial metals fell sharply as they were "caught up in the sell-off on financial markets", Commerzbank analysts said in a research note.
"The combination of a much gloomier US economic outlook, growing economic concerns in China, persisting debt problems of eurozone peripherals and worries about the stability of the euro - as well as rising risk aversion in general - are a deadly cocktail for financial markets," they added. "No wonder that commodities, which are often regarded as real assets, but often behave more like a high-risk asset class, have also been badly affected." By late Friday on the London Metal Exchange (LME), copper for delivery in three months sank to $9,189 a tonne from $9,798 the previous week.
--- Three-month aluminium fell to $2,460 a tonne from $2,624.
--- Three-month lead dipped to $2,422 a tonne from $2,635.
--- Three-month tin decreased to $24,650 a tonne from $28,350.
--- Three-month zinc slid to $2,274 a tonne from $2,486.
--- Three-month nickel dropped to $23,085 a tonne from $24,596.
OIL: World oil prices plummeted on both sides of the Atlantic, driven by weakening growth in the United States, the world's biggest oil consumer, and worries about European energy demand amid eurozone debt contagion. The energy market was hit particularly hard on Thursday, when New York crude shed $5.30 and London Brent oil lost a hefty $5.98. "The fear of a double dip recession with the slowdown in the US and the sovereign debt situation in Europe is having everybody biting their nails," said Adam Sieminski, chief energy economist of Deutsche Bank.
A double-dip recession refers to a short-lived recovery from one recession and then a new plunge back into economic contraction. By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in September tumbled to $106.93 a barrel from $115.91 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for September dived to $84.70 a barrel from $95.54 the previous week.
COCOA: Prices fell further on expectations of large supplies in Ghana and Ivory Coast, which are the two main cocoa producing nations. "The supply surplus on the cocoa market this crop year is likely to be even higher than previously presumed," said Commezbank analysts.
"The International Cocoa Organisation expects significantly higher cocoa output in Ivory Coast and Ghana, the two main producers." By Friday on Liffe, London's futures exchange, cocoa for delivery in September dropped to £1,845 a tonne from £1,858 the previous week. In New York on the NYBOT-ICE, cocoa for September fell to $2,945 a tonne from $2,971.
SUGAR: Prices fell in line with most other commodities. By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in October dropped to 27.85 US cents a pound from 29.50 cents the previous week. On Liffe, the price of a tonne of white sugar for October slid to £737.60 compared with £771 the previous week.
COFFEE: Coffee futures steadied in subdued trade. By Friday on NYBOT-ICE, Arabica for delivery in September was unchanged at 240.10 US cents a pound from the previous week. On Liffe, Robusta for September decreased to $2,048 a tonne from $2,062.
RUBBER: Rubber prices fell amid concerns over the health of the world economy. The Malaysian Rubber Board's benchmark SMR20 fell 459.55 US cents a kilo from 469.65 US cents the previous week.
GRAINS AND SOYA: Prices crept ahead. By Friday on the Chicago Board of Trade, maize for delivery in September firmed to $6.84 a bushel from $6.65 a week earlier. November-dated soyabean meal - used in animal feed - slipped to $13.37 a bushel from $13.57. Wheat for September rose very slightly to $6.74 from $6.72.
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