Bouts of dollar weakness meanwhile lent support to metals.

The Commodities Research Bureau's index of 17 commodities dropped to 273.05 points on Friday from 273.28 a week earlier.

GOLD: Gold prices settled around the 405-dollar mark this week, supported by a weakening of the dollar.

"After the recent long liquidation we believe that gold has begun to form a base and that barring any surprise rallies in the US dollar the metal will probably not fall materially from these levels," said UBS analyst John Reade.

A weaker dollar makes gold, which is priced in the US currency on world markets, more attractive to buyers using other currencies.

Another supportive factor was a report from the GFMS consultancy predicting that gold prices would rise modestly in the second half of 2004 to an average of 407 dollars.

Many of the supply and demand fundamentals will turn generally supportive through the rest of this year, the report said.

"When the market ends up with support from so many quarters, we should see prices being more stable and the risk to the downside starts to look quite limited," said GFMS analyst Philip Klapwijk.

The consultancy sees investor activity as being somewhat sidelined for much of the second half of 2004.

But this could give way to a renewed interest in gold as a hedge against the US dollar and broader economic problems for the United States.

"Well probably see a muddle-through, on the economic front, for much of the rest of this year and investors seem to be biding their time, waiting to see the results of the US presidential elections," said Klapwijk.

"But after that, we expect concerns to grow that the status quo is simply untenable. This could easily trigger a surge in gold investment and it's this that opens up the opportunity for the market to breach the 430 dollar mark sometime next year," he added.

By Friday afternoon, gold prices stood at 405.7 dollars per ounce on the London Bullion Market against 401.35 a week earlier.

SILVER: Silver prices were also buoyed by a fall in the value of the dollar.

"The metal has been whacked by speculative long liquidation, but base metals remain elevated and we continue to expect gold and the dollar to weaken," said UBS's Reade.

"There remains the chance for a last hurrah for silver but we do not see the metal at its 2004-year highs again in this metals cycle and are looking for opportunities to sell silver rather than buy more for a ride higher."

Silver prices stood at 6.265 dollars per ounce on Friday against 6.14 a week earlier.

PLATINUM AND PALLADIUM: Platinum and palladium prices flagged as speculators turned sellers.

The fundamentals for the two metals looked bearish, said Reade.

"Falling Chinese platinum demand and growing South African supply look set to bring the platinum market back into balance this year and this, together with a peak in the broader metal price cycle in the fourth quarter of 2004, should see platinum trade substantially lower in 2005 and 2006.

"The case for palladium is scarcely more positive as the palladium market is already oversupplied and large speculative longs are present in the New York Mercantile Exchange futures market."

By Friday, platinum prices stood at 836 dollars per ounce on the London Platinum and Palladium Market, unchanged from a week earlier.

Palladium prices traded at 208 dollars per ounce against 206 the previous week.

BASE METALS: Base metals were buttressed by the dollar's decline and the impact of Hurricane Ivan on supplies of alumina, the raw material used to make aluminium.

"We haven't on the whole had very good economic data. In theory that should be poor for base metals but as so often in recent months, the poor data has meant that the dollar has weakened, and with the dollar weakening, that has boosted the dollar prices of commodities and in particular base metals," said Societe Generale analyst Stephen Briggs.

Hurricane Ivan had also wreaked significant damage in Jamaica, a big supplier of alumina, he noted.

"We don't know quite what the extent of the damage is yet. It seems more damage to the ports (than refineries)," said Briggs.

"It looks like the shipments of alumina will be cut back and given that the market is already tight... it might start to affect aluminium production."

By Friday, three-month copper prices had risen to 2,825.5 dollars per tonne on the London Metal Exchange from 2,784 dollars a week earlier.

Three-month aluminium prices nudged up to 1,719 dollars per tonne from

Three-month nickel prices advanced to 12,875 dollars per tonne from 12,150.

Three-month lead prices climbed to 890 dollars per tonne from 877.

Three-month tin prices gained to 9,040 dollars per tonne from 8,900.

Three-month zinc prices firmed to 984 dollars per tonne from 972.

OIL: Oil markets remained on tenterhooks as oil majors battened down the hatches for Hurricane Ivan, causing estimated production losses in the Gulf of Mexico of at least four million barrels of oil.

According to US Minerals Management Service, workers on 575 platforms and 69 rigs had been evacuated from the Gulf of Mexico.

About 78 percent of the 1.7 million barrels per day (bpd) of oil production and 49 percent of gas output in the Gulf was affected.

The biggest US oil import terminal, the Louisiana Offshore Oil Port, stopped unloading tankers on Monday.

But traders took comfort from an apparent lack of major damage to oil rigs or coastal refineries in the region as the storm headed inland.

Markets also showed alarm at a report from the US Energy Department estimating that crude oil inventories in the United States tumbled by 7.1 million barrels to 278.6 million in the week to September 10, reaching the lowest levels in nearly seven months.

However traders were unfazed by a decision by the OPEC oil cartel to raise its official output quotas by almost four percent to 27 million barrels per day (bpd) from November 1.

Ministers said Wednesday's decision would have no impact on OPEC's actual output, which was already running some two million bpd over the official ceiling.

"The stock falls, combined with threats to production in the Gulf of Mexico, pushed OPEC's announcement that it would increase its nominal quota to 27 million bpd from November 1 firmly to the sidelines," said Catherine Hunter, analyst at the World Markets Research Centre.

"The US supply cuts this week are almost certain to reduce US stock data in next week's figures, and possibly the end-September data, making prices extremely vulnerable to further supply shocks in the weeks ahead," she added.

In London, Brent North Sea crude for November delivery -- the new reference contract -- climbed to 41.65 dollars per barrel in late trading on Friday from 39.79 a week earlier.

New York's light sweet crude for delivery in October stood at 44.65 dollars per barrel against 44.84 a week earlier.

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