Commodity prices faced a choppy week as further stimulus tapering from the Federal Reserve and turmoil across emerging markets overshadowed solid fourth-quarter economic growth in the United States.
The Fed said Wednesday that it will reduce its bond-buying or quantitative easing (QE) programme by $10 billion to $65 billion a month, citing a pick-up in the economy.
The news sent emerging market currencies plunging in India, South Africa and Turkey, despite a raft of interest rate hikes.
Sentiment won a boost Thursday as official data showed the US economy -- a key consumer of raw materials -- grew 3.2 percent in October-December, beating predictions of 3.0 percent.
OIL: New York prices rallied to the highest level so far this year on forecast-beating fourth-quarter economic growth in the United States, which is the world's biggest crude consuming nation.
"US GDP figures boosted demand expectations of the world’s biggest oil consumer," said Michael Hewson, analyst at traders CMC Markets UK.
Crude futures also soared on higher demand for heating fuel thanks to recent cold weather in the United States.
US benchmark West Texas Intermediate surged on Thursday to $98.59 per barrel, the highest point since January 2.
Prices tailed off Friday on weak Chinese data in subdued deals, with most Asian markets shut for the Lunar New Year holiday.
"With Chinese markets closed for the majority of the coming week and fears of emerging market contagion spreading from Turkey, Argentina and India as they struggle to control inflation, investors may opt to remain on the sidelines," added Sucden analyst Kash Kamal.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in March stood at $107.18 a barrel from $107.24 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for March rallied to $97.84 a barrel compared with $96.64 a week earlier.
Metals hit by firm dollar, stimulus reduction
PRECIOUS METALS: Prices fell as the dollar rose following news of US stimulus reduction and upbeat growth.
The news also weighed on gold because many investors argue that QE fuels higher inflation. The glamorous metal is widely regarded as a hedge against inflation.
Platinum and palladium meanwhile hit one-month lows at $1,366.75 and $704.50 respectively, despite ongoing strikes in major producer South Africa.
"Precious metals are once again finding themselves in the red as the week draws to a close," said analyst Fawad Razaqzada at online trading firm Forex.com.
"The main reason for their sluggish performance is to do with the firmer US dollar which has gained ground on the back of the upbeat GDP print and after the Fed tapered QE by an additional $10 billion."
The stronger greenback makes dollar-priced goods more expensive and tends to sap demand.
By late Friday on the London Bullion Market, the price of gold fell to $1,251 an ounce from $1,267 a week earlier.
Silver dipped to $19.31 an ounce from $20.19.
On the London Platinum and Palladium Market, platinum slid to $1,382 an ounce from $1,443.
Palladium slipped to $707 an ounce from $745.
BASE METALS: Base or industrial metals prices sank as traders also fretted over turmoil in emerging markets and the outlook for Chinese demand.
"Copper prices look set to close lower for the fifth week in succession as fears about another Chinese slowdown, combined with reduced demand from emerging markets, as the current turmoil starts to create a drag on growth prospects in the region," added analyst Hewson.
Chinese manufacturing contracted for the first time in six months in January, HSBC confirmed Thursday, raising questions over growth prospects for the world's second-largest economy this year.
The banking giant's final reading of China's purchasing managers' index (PMI), which tracks manufacturing activity in factories and workshops, fell to 49.5 this month.
It was its lowest figure since July and fractionally below the preliminary 49.6 reading HSBC announced last week.
The index is a closely watched gauge of the health of the Asian economic powerhouse. A reading above 50 indicates growth, while anything below signals contraction.
By Friday on the London Metal Exchange, copper for delivery in three months slid to $7,063 a tonne from $7,210.50 week earlier.
Three-month aluminium fell to $1,713.50 a tonne from $1,768.
Three-month lead retreated to $2,108 a tonne from $2,152.
Three-month tin dropped to $21,925 a tonne from $22,000.
Three-month nickel dipped to $13,750 a tonne from $14,553.
Three-month zinc declined to $1,964 a tonne from $2,027.
Sugar dives, but cocoa and coffee surge
SUGAR: Prices dived to multi-year lows, weighed down by worries over emerging markets turmoil and plentiful supplies.
Sugar sank to 14.70 US cents per pound in New York, the lowest point since June 2010.
In London, the commodity touched the weakest level since April 2009, at $399.10 a tonne.
"With sugar prices stuck in freefall since mid-October 2013, the recent events in emerging markets, particularly in Argentina, have led to concerns of contagion to Brazil and further pressure on sugar prices," said Societe Generale analyst Christopher Narayanan.
"For the moment, then, sugar prices remain pressured by a larger than expected global surplus, a strong start to the Thai harvest, uncertainty surrounding India’s export policy and support programmes, and tepid demand."
By Friday on LIFFE, the price of a tonne of white sugar for March rose to $410.50 from $404.90 a week earlier.
On New York's ICE Futures US exchange, the price of unrefined sugar for delivery in March eased to 15.04 US cents a pound from 15.05.
COCOA: Prices zoomed to their highest levels in more than two and a half years on the prospect of another production deficit this year.
The commodity, which is mostly used to make chocolate, rallied this week to £1,865 in London and $2,933 in New York, reaching levels last witnessed in September 2011.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in March rose to £1,861 a tonne from £1,778 a week earlier.
On ICE Futures US, cocoa for March increased to $2,921 a tonne from $2,806.
COFFEE: Coffee futures rebounded from the precious week's losses.
Prices jumped to a six-month high at $1,825 in London. They also reached 123.45 cents in New York, which was the best level so far this year.
"Coffee futures moved higher ... amid short covering following recent lows," said analysts at industry publication The Public Ledger.
By Friday on the ICE Futures US exchange, Arabica for delivery in March rallied to 121.60 US cents a pound from 114.50 cents a week earlier.
On LIFFE, Robusta for March gained to $1,801 a tonne from $1,700.
RUBBER: Prices in Kuala Lumpur fell as the ringgit strengthened against the US dollar, while jitters persisted over slowing growth in top consumer China.
The Malaysian Rubber Board's benchmark SMR20 fell to 193.20 US cents a kilo from 213.70 cents a week earlier.