Commodity prices diverged this week as markets focused on a deal to avert a US-led military attack on Syria and reacted to the US Federal Reserve’s surprise decision on stimulus.

The United States and Russia had last weekend agreed a deal to dismantle Syria’s chemical weapons, easing crude supply fears.

The week’s other major market-moving event occurred on Wednesday when the Federal Open Market Committee (FOMC) decided against scaling down its $85 billion a month bond-buying spree, known as quantitative easing (QE).

The FOMC said that although the economy appears to be holding up amid government spending cuts, it “decided to await more evidence that progress will be sustained” before deciding to scale down the stimulus package.

OIL: Crude futures retreated over the week following volatile trading triggered by easing Middle East supply concerns and the Federal Reserve’s surprise action.

“The main focus has returned to the oil (supply and demand) fundamentals,” said Myrto Sokou, senior research analyst at Sucden brokers.

Analysts said the return to production of Libyan oil fields and the easing of tensions in the Middle East after Syria agreed to a plan to put its chemical weapons arsenal under international control helped ease prices.

“The outlook for oil at the beginning of next week remains uncertain, with the German general elections on Sunday allied to data from China, the eurozone and the US all expected to give further direction to the global economy on Monday.

“In addition, the Syrian situation continues to rumble in the background,” Hornby added.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in November stood at $109.05 a barrel compared with $111.90 for the expired October contract a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October dropped to $105.59 a barrel from $107.58.

PRECIOUS METALS: Prices rallied following the Fed announcement.

Gold dropped below $1,300 an ounce for the first time since August 8 on Wednesday before the US central bank’s policy decision.

Traditionally a hedge against inflation, gold had tumbled on growing speculation over Fed tapering. Many investors argue that QE fuels higher inflation.

However prices soon rebounded.

By late Friday on the London Bullion Market, the price of gold rose to $1,349.25 an ounce from $1,318.50 a week earlier.Silver climbed to $22.74 an ounce from $21.72. On the London Platinum and Palladium Market, platinum edged up to $1,447 an ounce from $1,441.

Palladium grew to $726 an ounce from $700.

BASE METALS: Base or industrial metals rebounded.

“Metal prices surged noticeably following the Fed’s meeting,” said analysts at Commerzbank.

But Jessop noted that “industrial metals are far more sensitive to the near-term prospects for economic activity than to the outlook for monetary policy, with developments in China typically more important than those in the US”.

Meanwhile a strike that paralysed a Chilean copper mine for two weeks ended after workers struck a wage deal with management.

Chile is the world’s largest producer of the metal, generating about a third of global supply.

The agreement, reached Wednesday, foresees a three per cent salary increase, an $18,000 bonus per worker and a termination plan for those nearing retirement.

Codelco is responsible for 11pc of global copper production.

By Friday on the London Metal Exchange, copper for delivery in three months jumped to $7,346 a tonne from $7,055 a week earlier.

Three-month aluminium climbed to $1,827 a tonne from $1,791.50.

Three-month lead grew to $2,105 a tonne from $2,091.50

Three-month tin gained to $23,285 a tonne from $22,579.

Three-month nickel increased to $14,370 a tonne from $13,692.

Three-month zinc advanced to $1,900 a tonne from $1,868.

COCOA: Futures hit fresh one-year high points on tight supply expectations.

By Friday on LIFFE, London’s futures exchange, cocoa for delivery in December edged up to £1,705 a tonne from £1,700 a week earlier.

On New York’s NYBOT-ICE exchange, cocoa for December rose to $2,615 a tonne from $2,595 a week earlier.

COFFEE: Prices struck new multi-year lows on rising stockpiles.

By Friday on NYBOT-ICE, Arabica for delivery in December slid to 115.25 US cents a pound from 119.90 cents a week earlier.

On LIFFE, Robusta for November dropped to $1,680 a tonne from $1,756.

SUGAR: Futures traded mixed.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in March stood at 17.73 US cents a pound compared with 17.14 cents for the October contract a week earlier.

On LIFFE, the price of a tonne of white sugar for December fell to $486.50 from $492.90.

GRAINS AND SOYA: Maize and soya prices fell on solid supplies, while wheat futures grew on high demand, traders said.

By Friday on the Chicago Board of Trade, November-dated soyabean meal used in animal feed dropped to $13.14 a bushel from $13.81 a week earlier.

Maize for delivery in December slid to $4.52 a bushel from $4.59.

Wheat for December rose to $6.44 a bushel from $6.41.

RUBBER: Prices climbed after the Fed’s move to maintain its monetary stimulus, traders said.

The Malaysian Rubber Board’s benchmark SMR20 rose to 243.75 US cents a kilo from 238.50 cents the previous week.