LONDON, Sept 6 (AFP): Commodities mostly fell this week on the back of the strong dollar, which surged following news of a surprise package of deflation-fighting stimulus measures in the eurozone.
"Weakness across the commodity space resumed this week," said SaxoBank analyst Ole Hansen.
"Multiple factors drove this weakness, not least the continued surge in the dollar, which gathered additional momentum following the surprise intervention on rates and bonds from the ECB."
The European Central Bank (ECB) cut its key interest rate to a record-low of 0.05 per cent on Thursday, from 0.15 per cent, and announced an asset-purchase plan in order to counter deflation pressures, boost lending and lift sluggish growth in the eurozone.
In reaction, the euro slumped to a 14-month low of $1.2920, while the dollar leapt to 105.71 yen -- last seen in early October 2008.
A stronger greenback makes dollar-priced oil and commodities more expensive for buyers using weaker currencies. That tends to dent demand and push prices lower.
"The announcement... that the ECB had cut rates to a record low, while pledging to buy hundreds of billions of bonds in order to support the eurozone, triggered a major move in the dollar," added Hansen.
OIL: The oil market fell as official data showed the US economy -- a major consumer of raw materials -- added 142,000 jobs in August, dashing hopes for a gain of 200,000.
The mood was soured after official data confirmed that the 18-nation eurozone economy stagnated in the second quarter with zero growth.
Traders also eyed abundant global crude supplies and digested news of a ceasefire deal between Ukraine and pro-Russian rebels.
The oil market began the week on a subdued note on Monday with US traders away for the Labor Day public holiday.
Brent jumped $2.43 after sliding the previous day to its lowest level since May 2013.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in October fell to $101.29 a barrel from $102.89 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October slid to $94.05 per barrel compared with $95.40.
PRECIOUS METALS: Gold dived to a 2.5-month low of $1,257.39 per ounce, rocked by the strong dollar and falling safe-haven demand.
Easing Ukraine concerns meanwhile dimmed demand for gold as a haven investment.
By Friday on the London Bullion Market, the price of gold sank to $1,266 per ounce from $1,285.75 a week earlier.
Silver eased to $19.13 an ounce from $19.47.
On the London Platinum and Palladium Market, platinum gained to $1,406 per ounce from $1,424.
Palladium climbed to $887 an ounce from $898.
BASE METALS: Base or industrial metal prices mostly declined, but nickel rose on the back of a possible exports ban in the Philippines.
By Friday on the London Metal Exchange, copper for delivery in three months slid to $6,932.75 a tonne from $6,960 a week earlier.
COCOA: Prices fell, having struck a three-year peak in New York the previous week, as traders fretted over the prospect of a surplus.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in December slid to £1,999 a tonne compared with £2,037 a week earlier.
COFFEE: Prices bucked the downward trend to strike one-month highs on renewed supply concerns in leading producer Brazil.
By Friday on ICE Futures US, Arabica for delivery in December eased to 200.50 US cents a pound compared with 200.80 cents a week earlier.
SUGAR: Futures fell to seven-month lows as the market was dampened by abundant supplies.
On ICE Futures US, the price of unrefined sugar for October dipped to 15.06 US cents a pound from 15.64 US cents a week earlier.
RUBBER: Prices in Kuala Lumpur fell further after top rubber supplier Thailand cleared half its stockpile.
