Commodity prices mainly fell over the week despite the prospect of further US stimulus, while benchmark oil futures were dragged down by easing concerns over stretched supplies. Federal Reserve chief Ben Bernanke on Monday said that the US central bank would likely keep stimulative policies in place despite improvements to the job market, weighing on the dollar.
PRECIOUS METALS: Gold dipped over the week but not before a brief spike to two-week highs near $1,700 an ounce on dollar weakness. "Gold prices continue to take their cue from currency moves," said Barclays Capital analyst Suki Cooper. A weaker dollar makes commodities priced in the US unit cheaper for buyers using rival currencies, lifting demand.
By late Friday on the London Bullion Market, gold dipped to $1,662.50 an ounce from $1,664 the previous week. Silver grew to $32.43 an ounce from $31.54. On the London Platinum and Palladium Market, platinum increased to $1,640 an ounce from $1,617. Palladium dipped to $651 an ounce from $658.
OIL: Prices dropped mainly owing to an increased prospect of Western countries releasing emergency crude reserves. "Weighing on the oil price is the ongoing debate about the release of strategic oil reserves, as this increasingly appears to be a real option," said Commerzbank analyst Carsten Fritsch. "Besides the US, Great Britain and France, it would seem that Japan and South Korea are also considering such a step."
He added: Any release of strategic reserves would at best have a psychological impact on prices which could thus quickly evaporate." White House spokesman Jay Carney said on Thursday that while releasing emergency stocks was an option, "no decisions have been made and no specific actions have been proposed."
Also this week, France's Energy Minister Eric Besson gave the clearest indication so far that his country was ready to release some of its reserves. It marked an evolution of France's position. Last week, Besson said that Paris was merely studying the possibility of opening its reserves as "one of the options" to tame oil prices.
In theory, a nation's reserves are held in case of a major international crisis like a war or a natural disaster in an oil producing area. But Asia's fuel-hungry economies are once more gathering steam, pushing up prices at a time when the economic recovery remains more vulnerable in some western economies.
Tensions are also running high in the Middle East, with Iranian exports limited by embargo and political unrest in several oil producers. France and the United States are also in election mode, with both US President Barack Obama and his French counterpart Nicolas Sarkozy facing pressure from voters over high pump prices for petrol and diesel.
Talk of releasing strategic reserves is "done purely for political purposes," said Phil Flynn at PFG Best brokers. The International Energy Agency, which co-ordinates an emergency release of strategic reserves by its 28 member countries, said on Thursday that it was closely monitoring market developments.
Oil prices also fell this week on data showing that US crude inventories rose by the biggest amount in 20 months last week, and on repeated Saudi Arabian pledges to ensure adequate supplies amid a drop in Iran crude exports. The market remains supported by wariness over a possible supply crunch brought on by Western sanctions on Iran.
Output from one of Opec's biggest producers has shrunk considerably on the back of sanctions from the US and its Western allies, who believe that Tehran is working towards nuclear weapons capability despite its denials. By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in May dropped to $123.24 a barrel from $125.35 the previous week. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for May slipped to $103.33 a barrel from $108.25.
BASE METALS: Base metals prices were mixed as investors responded to weaker Chinese growth and the prospect of further Federal Reserve stimulus to boost US demand. "The rollercoaster ride on the metal markets continues," Commerzbank analysts said in a note to clients.
Barclays Capital analyst Gayle Berry added that prices were weighed down by "renewed Chinese growth concerns." By late Friday on the London Metal Exchange, copper for delivery in three months grew to $8,454.25 a tonne from $8,405 the previous week.
----- Three-month aluminium dipped to $2,144 a tonne from $2,183.
----- Three-month lead gained to $2,023 a tonne from $2,000.
----- Three-month tin climbed to $23,100 a tonne from $22,401.
----- Three-month nickel dropped to $17,510 a tonne from $18,378.
----- Three-month zinc edged up to $2,007 a tonne from $2,000.
COCOA: Prices dropped as US cocoa stockpiles reached the highest level for almost five years, offsetting news of tight supplies in the Ivory Coast, traders said. By Friday on Liffe, London's futures exchange, cocoa for delivery in July stood at £1,470 a tonne compared with £1,479 for the May contract a week earlier. In New York on the NYBOT-ICE, cocoa fell to $2,235 a tonne from $2,303.
COFFEE: New York Arabica coffee prices remained stuck around 17-month low points on the prospect of a strong Brazilian harvest. By Friday on NYBOT-ICE, Arabica for May dipped to 177.70 US cents a pound from 177.80 cents. On Liffe, Robusta for delivery in May gained to $2,024 a tonne from $1,995 a week earlier.
SUGAR: Sugar futures retreated on higher Indian exports. By Friday on Liffe, the price of a tonne of white sugar for delivery in May slid to $635.30 from $670.40 the previous week. On NYBOT-ICE, the price of unrefined sugar for May fell to 24.54 US cents a pound from 25.68 cents a week earlier.
RUBBER: Rubber prices increased on tight supplies. The Malaysian Rubber Board's benchmark SMR20 rose to 371.55 US cents a kilo from 367.30 cents the previous week.