London- Commodity prices diverged this week, but oil topped $105 per barrel after an upbeat non-farm payrolls report in theUnited States, which is a top consumer of many raw materials including crude.

TheUSeconomy added a modest 175,000 jobs in May, official data showed Friday, scotching worries that job creation had slumped in the spring. Market expectations had been for a smaller gain of 159,000 jobs.

The news sent gold prices sliding, however, as the dollar strengthened on hopes that the US Federal Reserve would taper its quantitative easing (QE) stimulus policy sooner than anticipated.

The rising greenback makes dollar-priced commodities more expensive for buyers using weaker currencies. That can hit demand and weigh on prices.

OIL: Prices spiked higher, with Brent oil rallying as high as $105.01 per barrel on Friday, as the brighteningUSdemand outlook offset a poor start to the week.

"Oil opened the week trading below the psychologically important $100-per-barrel mark after suffering heavy losses over the weekend but pushed above $103 midweek, supported by an improved outlook for demand," said analyst Lucy Sidebotham at energy consultancy Inenco.

She added: "Prices held on to gains towards the end of the week, despite worries continuing over the US Federal Reserve drawing back its stimulus."

"The upbeat (payrolls) data shows a positive sign ofUSgrowth, leading to an increase in demand from a key commodity consuming nation."

She added: "Prices were also been supported by a steep fall in US crude stocks and import declines."

The US Department of Energy said Wednesday that American crude reserves plunged 6.3 million barrels in the week ended May 31. That was far more than market expectations for a drop of just 400,000 barrels.

A decline in stockpiles supports crude prices as it suggests a pick-up in oil demand. Gasoline demand meanwhile traditionally rises during theUSsummer driving season, which is currently underway and sees many Americans take to the roads for their holidays.

By Friday onLondon's Intercontinental Exchange, Brent North Sea crude for delivery in July jumped to $104.68 a barrel from $101.06 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for July rallied to $96.14 per barrel from $92.67 a week earlier.

PRECIOUS METALS: Gold fell sharply on the back of the strong dollar on Friday, while platinum rose on supply jitters in key producerSouth Africa.

"This afternoon's small upside surprise on non-farm payrolls lent much-needed support to equity markets, and sent the US dollar soaring against its peers," noted CMC Markets analyst Matt Basi. "Gold prices have reacted negatively to the data.

"The stronger dollar puts pressure on commodities and speculation that the better-than-expected employment picture may hasten the end of the Fed's quantitative easing (QE) programme - easing demand for the yellow metal as an inflation hedge."

Gold is regarded by many investors as a safe store of value in times of rising inflation. At the same time, quantitative easing can stoke inflationary pressures, according to analysts.

By late Friday on the London Bullion Market, the price of gold sank to $1,386 an ounce from $1,394.50 a week earlier.

Silver firmed to $22.60 an ounce from $22.57.

On the London Platinum and Palladium Market, platinum rose to $1,505 an ounce from $1,459.

Palladium increased to $754 an ounce from $744.

BASE METALS: Base or industrial metal prices traded within a narrow range amid persistent concern over the strength of demand from key consumer China.

"Industrial metals ... look fragile as the Chinese economy is once again performing below expectations, and even potentially bullish supply news is failing to lift markets," said Barclays analyst Suki Cooper.

China's manufacturing activity shrank more than first reported in May, HSBC said Monday, confirming the first contraction in seven months.

The British banking giant's final purchasing managers' index (PMI) reading for May came in at 49.2. That was the lowest for eight months and worse than the preliminary figure of 49.6.

A reading below 50 indicates contraction in the sector.

By Friday on the London Metal Exchange, copper for delivery in three months fell to $7,245 a tonne from $7,270 a week earlier.

Three-month aluminium rose to $1,953 a tonne from $1,902.

Three-month lead dropped to $2,168.50 a tonne from $2,183.

Three-month tin increased to $21,000 a tonne from $20,900.

Three-month nickel climbed to $15,050 a tonne from $14,670.

Three-month zinc eased to $1,908.25 a tonne from $1,912.

COCOA: Cocoa futures rebounded on stubborn worries over forecasts of a large deficit.

The International Cocoa Organization (ICCO) has last week hiked its forecast to a deficit of 60,000 tonnes for the 2012/13 season closing in September, up from 45,000 previously.

This week, trade publication Public Ledger predicted an even greater deficit of 74,000 tonnes.

It also forecast a deficit of 178,000 tonnes in 2013/14. By Friday on LIFFE, London's futures exchange, cocoa for delivery in July rose to £1,557 a tonne from £1,502 a week earlier.

On New York's NYBOT-ICE exchange, cocoa for July rallied to $2,341 per tonne from $2,210.

COFFEE: Prices dived to a three-year low point in New York on expectations of abundant supplies in top producer Brazil, but ended on a mixed note.

"Coffee futures reached a new three-year low on Tuesday, as it is expected that Brazil will produce a large crop," said Public Ledger analysts.

"News that Indonesian coffee exports in May were up 140 percent from last year's levels also weighed."

By Friday on NYBOT-ICE, Arabica for delivery in July rose to 127.25 US cents a pound from 126.65 cents a week earlier. On LIFFE, Robusta for July dropped to $1,867 a tonne from $1,892.

SUGAR: Prices skirted close to three-year lows as traders eyed surplus expectations that have dogged the market in 2013.

"Sugar has plunged in price by 16 percent since the beginning of the year, and as such has been one of the worst-performing commodities," noted Commerzbank analysts in a research note.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in July slipped to 16.68 US cents a pound from 16.72 cents a week earlier.

On LIFFE, the price of a tonne of white sugar for August eased to $479 from $479.80.

GRAINS AND SOYA: Soya extended gains from the previous week, while maize and wheat prices stabilised.

By Friday on the Chicago Board of Trade, July-dated soyabean meal -- used in animal feed -- rose to $15.38 a bushel from $15.10 a week earlier.

Maize for delivery in July edged up to $6.63 a bushel from $6.62.

Wheat for July eased to $7.01 a bushel from $7.05.