Commodities mostly rallied this week on investor relief as US lawmakers clinched a last-gasp deal to avoid the fiscal cliff of tax hikes and spending cuts in the United States, stoking optimism over demand.
"The commodities markets have started the new year with a bang," said Commerzbank analyst Eugen Weinberg.
"The main reason cited for this is the agreement achieved in the fiscal dispute in the US, though growing economic optimism and risk appetite, a weaker US dollar and the expansionary monetary policy pursued by central banks are likely to lend additional support to the upswing.
"We thus look ahead to the year 2013 with great optimism. This will also be good news for most businesses, as prices are being driven above all by robust demand."
The fiscal deal was seen as a step, albeit a temporary one, towards correcting US public finances, which are suffering from a huge annual deficit and accumulated mountain of debt.
Traders also digested December's US non-farm payrolls report which came in largely as expected, showing modest job growth, while the American economy's huge services sector showed a surprising expansion.
OIL: Prices jumped following news that the United States -- the world's biggest consumer of crude oil -- has avoided harsh "fiscal cliff" measures that had threatened to plunge it back into recession.
However, while Democrats and Republicans passed a compromise, they only delayed the imposition of spending cuts for two months, meaning another debilitating stand-off is almost certain at the end of next month.
"Relief that the US avoided its fiscal cliff pushed Brent crude to a two-month high at the start of the New Year," said analyst Gary Hornby at Inenco.
"Although the deal was cobbled together at the last minute, oil prices rose as the alternative was much worse."
On Wednesday, the first trading day of 2013, Brent hit $112.90 per barrel -- its highest level since mid-October. New York crude meanwhile touched $93.87, which was a mid-September pinnacle.
The oil market has since retraced some of its gains after minutes from the Federal Reserve's December policy meeting indicated that its quantitative easing stimulus policy could end sooner than expected.
Prices also pulled back somewhat on growing concerns over further political wrangling in Washington in the coming months.
There are big worries about the lifting of the debt ceiling, also at the end of February, with analysts saying the US could witness a repeat of the row in summer 2011 that saw Washington's credit rating downgraded for the first time.
"Oil prices have begun to ease back slightly, with the euphoria over the US budget deal fading away and the threat of a possible downgrade from the big three ratings agencies as well as high oil production levels," added Hornby.
By Friday on the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for delivery in February climbed to $92.65 a barrel from $90.97 a week earlier.
On London's Intercontinental Exchange, Brent North Sea crude for February gained to $111.22 a barrel from $110.72 the previous week.
PRECIOUS METALS: Gold faced a rollercoaster ride, soaring to $1,694.81 on Wednesday to the highest level since December 18, as the market was driven by optimism over the fiscal cliff breakthrough deal.
However gold plunged on Friday to $1,625.85 -- a low point last seen on August 21 -- as the Federal Reserve minutes dampened concerns over rising inflation.
Sister metal silver faced a similar fate, soaring as high as $31.48 on Wednesday before diving to $29.23 on Friday.
Glamorous metal gold is regarded as a safe store of value in times of elevated inflation.
"Gold has softened a little on US dollar strength now that the initial bout of euphoria over the deal to avert the fiscal cliff has passed," said Ross Norman, head of London-based bullion broker Sharps Pixley.
He added: "Gold is seen primarily as an inflation hedge and a wealth preserver and to that extent we are seeing some some investors exiting gold."" By late Friday on the London Bullion Market, gold dipped to $1,648 an ounce from $1,657.50 a week earlier.
Silver slid to $29.32 an ounce from $30.15.
On the London Platinum and Palladium Market, platinum rose to $1,557 an ounce from $1,527.
Palladium fell to $689 an ounce from $675.
BASE METALS: Base or industrial metals scored multi-month peaks in the first trading week of 2013, as traders celebrated the fiscal cliff deal and upbeat Chinese data.
"Despite the meagre progress the politicians made, markets are rejoicing," said INTL FCStone analyst Edward Meir.
"Base metals are up sharply, with copper up by about $270 per tonne and now at the $8,200 mark. There are good gains in the rest of the group as well, with lead and tin in breakout mode."
Sentiment was also boosted after official data showed that China's manufacturing activity expanded in December for a third straight month, adding to signs the world's number two economy is emerging from a prolonged downtrend.
The official purchasing managers' index (PMI) stood at 50.6 in December, unchanged from the previous month. A reading above 50 indicates expansion.
By late Friday on the London Metal Exchange, copper for delivery in three months soared to $8,116.50 a tonne from $7,888 a week earlier.
Three-month aluminium rallied to $2,090 per tonne from $2,067.
Three-month lead grew to $2,365.24 a tonne from $2,325.
Three-month tin rose to $23,975 a tonne from $23,252.
Three-month nickel increased to $17,585 a tonne from $17,150.
COFFEE: Coffee prices forged seven-week peaks on speculative buying interest but finished the week with mixed fortunes.
By Friday on NYBOT-ICE, Arabica for delivery in March eased to 145.80 US cents a pound from 145.85 US cents a week earlier.
On LIFFE, Robusta for March gained to $1,937 a tonne from $1,907 a week earlier.
COCOA: The market slid on the back of plentiful supplies of the commodity which is mostly used to make chocolate.
By Friday on LIFFE, London's futures exchange, cocoa for delivery in March dropped to £1,417 a tonne from £1,445 a week earlier.
On New York's NYBOT-ICE exchange, cocoa for March decreased to $2,213 a tonne from $2,262 a week earlier.
SUGAR: Prices hit multi-week highs after the fiscal cliff deal, but ended in negative territory on expectations of rising output from key producer Brazil.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in March fell to $511.60 from $522 a week earlier.
On NYBOT-ICE, the price of unrefined sugar for March decreased to 19.00 US cents a pound from 19.45 cents the previous week.
RUBBER: Prices climbed on hopes of buoyant Chinese demand, while production was expected to be hit by the annual rainy season in key rubber-producing countries.
The Malaysian Rubber Board's benchmark SMR20 ended the week at 307.90 US cents a kilo, up from 300.50 cents the previous week.