Daily Gold Update

Source: Marketwatch.com

San Francisco— Gold futures fell Friday, but finished the session almost $17 an ounce above their week-ago close after marking the highest level since 1987.

At the same time, copper prices logged a new lifetime record, climbing as high as $1.98 a pound and approaching the key $2 mark.

Gold for December delivery reached $489.50 an ounce on the New York Mercantile Exchange, its highest level since December 1987, then pulled back by $1.40 to $485.50 an ounce.

But prices were up $16.80, or 3.6%, from last week's close of $469.40.

"Fundamentals for the gold market look good with rising demand, weak supply and the potential for central banks to be much less willing sellers of the metal," said John Bridges, analyst at J.P. Morgan.

Gold has "remarkably been ignoring dollar strength," he added, although that may be due to the dollar/euro reaching critical support at $1.744, a level that acted as resistance twice in 2003.

"Additionally, Barrick has with its bid for Placer Dome emphasized the shortage of new gold discoveries and the likelihood of falling gold supply in future," said Bridges.

But "with the dollar continuing to rise as well as the metals and with sentiment in the metals so bullish, it would not be surprising if something snapped before long," said William Adams, an analyst at BaseMetals.com.

Copper futures reached a record $1.98 a pound and closed up 3.2 cents in New York at $1.978. It was 3.8% above the week-ago close of $1.9055.

Prices have surged this week on speculation that China is being forced to buy large quantities of copper to cover a position taken by a Chinese copper dealer in London, who has subsequently disappeared.

All in all, "copper is now has $2 squarely in the crosshairs, but … what may look to be a virtual certainty many times proves elusive," said Dale Doelling, chief market technical at Trends In Commodities.

"The only thing that matters is that the trend is up, and in that respect, nothing has changed from a technical perspective."

Meanwhile, platinum futures added $3.70 to close at $986.10 an ounce. The contract on Thursday reached $1,000 for the first time in more than 25 years before closing lower, pulling back after reaching the objective of many analysts.

Prices for the contract closed $14.20 above last Friday's close of $971.90.

The metal, both precious and industrial, has been on a tear on increased usage in computer hard disks, LCD glass panels and auto catalysts for diesel vehicles.

December palladium, platinum's sister metal, closed up $4.90 Friday at $267 an ounce, ending above last week's $250.05 close.

And December silver closed down 3.5 cents at $8.067 an ounce, after trading at $8.16, its highest level since December 2004. For the week, it was up 4%.

Inventories of copper, silver and gold were all unchanged as of late Thursday, according to Nymex. Copper supplies were at 3,690 short tons, silver at 116.4 million troy ounces and gold at 6.62 million troy ounces.