Commodities prices mostly extended gains last week, with oil and coffee amongst the strongest performers for a second successive week. Raw materials were traded during a shortened week owing to public holidays in the United States and Britain on Monday. The Commodities Research Bureau's index of 17 commodities climbed to 306.13 points on Friday, from 300.77 points the previous week.
GOLD: Gold prices rose after tumbling earlier in the week when the dollar jumped against the euro. "A brief pause to the dollar advance allowed gold to post a light bounce," said James Moore, an analyst at the specialist website TheBullionDesk.com. Gold prices had fallen to the lowest level for more than three months on Tuesday after French voters rejected the European Union constitution Sunday and due to cooler demand for the precious metal in Asia.
On the London Bullion Market, the price of an ounce of gold dropped to 414.45 dollars at Tuesday's late fixing - the lowest level since February 10. A day later the euro dropped to 1.2160 dollars, the lowest level since September 20 after the Dutch voted overwhelmingly against the EU constitution in the wake of the French 'no' vote.
A stronger US currency makes gold - denominated in dollars on world markets - more expensive for buyers.
Aside from the stronger dollar, gold prices suffered from a fall in buying interest from India, where the marriage season was approaching its end and reducing the amount of jewellery bought as gifts.
"The signs are not good for gold, with traders in Asia reporting soft demand from both India and the Far East," Barclays Capital analyst Kamal Naqvi said.
World demand for gold had been "incredibly strong" in the first quarter of 2005, notably in the jewellery sector in India, the World Gold Council said Wednesday.
Demand rose 26 percent to 977 tonnes from the first quarter in 2004, the WGC said in a report published in London.
The jewellery sector saw demand rise 19 percent to 528.20 tonnes from a year ago. In India, the world's biggest gold consumer, demand soared 72 percent on a 12-month basis.
On the London Bullion Market, gold prices climbed to 423.55 dollars per ounce at the late fixing on Friday from 418.25 dollars the previous week.
SILVER: Silver prices reached the highest level for almost three months, inspired by gold's late rally.
"Silver continues to be the star" amongst precious metals, Naqvi said.
Prices hit 7.53 dollars per ounce at the late fixing Friday, the highest level since March 10."As always with silver, there is very little fundamental basis for the move with the market still tending towards physical surplus," Naqvi added.
On the London Bullion Market, silver prices rose to 7.530 dollars per ounce at the late fixing Friday from 7.170 dollars the previous week.
PLATINUM AND PALLADIUM: Platinum prices benefited from sustained demand while its sister metal palladium steadied.
"Platinum is performing impressively, with short-covering from the Japanese general public and ongoing fund interest being the principal drivers. Palladium continues to be far more subdued," Naqvi said.
Short-covering refers to the repurchase of a previously sold contract. Traders aim to buy it back for cheaper than the original sale price.
By Friday, platinum prices gained to 874 dollars per ounce on the London Platinum and Palladium Market from 863 dollars the previous week.
Palladium prices were unchanged at 184 dollars per ounce on Friday.
BASE METALS: Base metals prices advanced, led by copper owing to meagre global inventories.
"The latest rallies in base metal prices have taken many by surprise," Barclays Capital analyst Ingrid Sternby said. "Copper has been the star performer, being up nearly 10 percent since the lows in mid-May."
By Friday, three-month copper prices surged to 3,254 dollars per tonne on the London Metal Exchange from 3,088.50 dollars the previous week.
Three-month aluminium prices rose to 1,786 dollars per tonne Friday from 1,750 dollars.
Three-month nickel prices climbed to 16,600 dollars per tonne on Friday from 16,400 dollars.
Three-month lead prices increased to 976 dollars per tonne Friday from 974 dollars.
Three-month zinc prices advanced to 1,335 dollars per tonne Friday from 1,272 dollars.
Three-month tin prices stood at 7,825 dollars per tonne Friday from 8,045 dollars.
OIL: World oil prices surged on supply worries caused by a refinery shutdown in the United States and low levels of US distillates inventories. Oil futures rocketed 2.63 dollars, or five percent, to reach the highest closing level in more than a month on the New York Mercantile Exchange Wednesday after Royal Dutch/Shell confirmed it was forced to shut part of a refinery in the United States after a pipeline burst.
Shell shut two units used to produce gasoline, or petrol, at a refinery in Texas on Monday, coinciding with the start of US summer holiday driving season.
Prices shed almost a dollar Thursday after official data showed a jump in US crude stockpiles that eased gasoline supply worries.
But they rebounded strongly Friday on disruption to exports leaving Iraq and concern over possible heating fuel shortages during the northern hemisphere winter, traders said
The US Department of Energy said Thursday that distillates stockpiles rose 700,000 barrels to 106.4 million in the week ending May 27.
Crude oil inventories increased by 1.4 million barrels to 333.8 million and gasoline stockpiles rose 1.3 million barrels to 216.7 million.
"Refineries usually produce more gasoline and less of other fuels during spring to meet summer driving demand, which has led to concern that distillate stocks will not build sufficiently ahead of their peak demand season later in the year going into winter," analysts at the Sucden brokerage firm said. "The market is currently almost looking for excuses to be bullish, despite the rising inventories of gasoline and crude, making it harder for producers such as Saudi Arabia to force the market down with higher production."
Prices had fallen at the start of the week after doctors said that Saudi Arabia's King Fahd had responded to treatment for pneumonia - a condition that had sparked concerns about crude production in the his oil-rich kingdom.
By Friday, New York's light sweet crude for July delivery rocketed to 54.25 dollars per barrel from 51.50 dollars the previous week.
In London, Brent North Sea crude for July delivery gained to 53.14 dollars per barrel from 50.60 dollars.
RUBBER: Rubber prices rose owing to supplies being unable to match robust demand.
"The key reason is still the supply imbalance," one London trader said. "The supplies are very low, which causes some nervousness. There is still too much rain in the producing area (in Asia)... Strong demand is also providing some momentum."
In Osaka, the RSS 3 July contract rose to 161.80 US cents on Friday, from 158 cents a week earlier.
Singapore's RSS 3 July contract climbed to 141.25 US cents on Friday, from 137.50 cents.
COCOA: Cocoa futures overturned early losses to climb on renewed violence in leading producer Ivory Coast.
At least 70 people were killed in Ivory Coast over two days of violence in the troubled west African country.
The UN Security Council on Friday approved an elections monitoring team for Ivory Coast to ensure its October 30 presidential vote was free and fair.
Speculative selling Wednesday had sent prices to the lowest level in 11 months - 1,392 dollars per tonne in New York - amid a strong dollar.
On Liffe, London's futures exchange, the price of cocoa for July delivery increased to 825 pounds per tonne on Friday from 811 pounds a week earlier.
On the CSCE, the New York futures market, the July contract stood at 1,425 dollars per tonne on Friday, from 1,420 dollars.
COFFEE: Coffee prices reached fresh five-year high points in London amid poor weather in leading producers Brazil and Vietnam.
Coffee hit 1,237 dollars per tonne on Friday, the highest level since January 10, 2000. Futures have jumped 70 percent in London since the start of 2005 and by 20 percent in New York, following six years of dampened prices.
"Coffee players are expecting the market to continue to make further gains in the weeks ahead as speculation remains that bad weather could damage the crops in Vietnam and Brazil," Sucden analysts said.
On Liffe, Robusta quality for July delivery rose to 1,270 dollars per tonne on Friday from 1,188 dollars a week earlier.
On New York's CSCE market, Arabica for July delivery stood at 124.25 cents per pound on Friday, from 122.40 cents.
SUGAR: Sugar prices rose on sustained demand that should help to support prices over the coming weeks, Sucden analysts said. By Friday on Liffe, the price of a tonne of white sugar for August delivery increased to 249.40 dollars from 246.20 dollars a week earlier.
On the CSCE in New York, a pound of unrefined sugar for July delivery stood at 8.87 cents on Friday from 8.77 cents.
GRAINS AND SOYA: Soya and grains prices were mixed amid rainfall in the US Midwest region.
Looking ahead, "everything will depend on the weather", Allendale analyst Joe Victor said.
On Liffe, wheat for July delivery stood at 68.00 pounds per tonne on Friday from 67.50 pounds a week earlier.
In Chicago, the price of wheat for July delivery fell to 323.25 cents per bushel Friday from 337.75 cents.
Maize for July delivery dropped to 217.50 cents per bushel on Friday from 222.75 cents.
Soyabeans for July delivery rose to 672.50 cents per bushel on Friday from 670.50 cents.
July-dated soyabean meal - used in animal feed - increased to 213.30 dollars per tonne on Friday from 209 dollars.
COTTON: Cotton prices slid to the lowest level for three and a half months as a firmer dollar encouraged speculators to sell.
Cotton fell to 47.65 dollars per pound on Wednesday in New York, the lowest level since February 21.
"Pressure came from a strong dollar, which led speculators to sell. A poor technical picture has also been bearish for cotton," Refco analyst Ann Prendergast said. "Demand remains strong for cotton and with prices at multi-month lows, some additional buying may occur."
New York's July contract fell to 48.70 cents per pound on Friday from 50.65 cents the previous week.
The Cotton Outlook Index of physical cotton slipped to 53.95 cents on Thursday from 54.80 cents a week earlier.
WOOL: Wool prices decreased in leading producer Australia despite the country's dollar falling against its US counterpart and as strong Chinese demand failed to offset falling orders elsewhere.
"The steadiness seen in the market over the last six months has been disrupted over the last two weeks with successive weekly falls," the Australian Wool Industries Secretariat said.
The Australian Eastern index fell to 7.24 Australian dollars per kilo on Thursday, from 7.27 Australian dollars a week earlier.
The British Wooltops index was unchanged at 396 pence.
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