Daily Gold Update

Source: Marketwatch.com

New York— The strong rallies in gold and copper showed no sign of abating Friday, with gold setting a new seven-week peak and copper surging to a new contract high.

At last check, gold for August delivery rallied another $3, or 0.7%, to trade at $440.90 an ounce on the New York Mercantile Exchange.

At its best level, the contract touched $441.30 an ounce.

Gold has attracted strong buying recently, rising against both the euro and dollar, as investors, who are losing confidence in currencies, tout gold as a safe haven investment, analysts said.

Exerting little influence over metals recently, the dollar weakened against the euro after news of a record high current account deficit in the first quarter reignited concerns about how the U.S. will fund the shortfall.

Earlier, the Commerce Department unveiled a record $195.1 billion quarterly current account deficit that amounted to a record 6.4% of gross domestic product.

With the negative sentiment towards the euro following the French and Dutch rejections of the EU constitution and the dollar weighed down by the U.S. structural problems of twin deficits, there's a growing realization that gold and other commodities offer far more stable investment prospects than paper currencies, said James Moore of TheBullionDesk.com

Meanwhile, July copper added another 2.35 cents to trade at $1.5930 a pound.

Analysts said the metal's upward momentum was fueled by strong overseas demand especially from China.

But William Adams of BaseMetals.com cautioned although copper is looking strong and may well push higher, the upside going may be difficult with the summer slowdown ahead.

"Overall this situation is likely to lead to increased volatility, especially if shorts start to build up positions again and volumes decrease into the summer," Adams said.

Back on Nymex, other metals also opened higher.

July silver added 1 cent to trade at $7.38 an ounce.

July platinum gained $10.50 to $902 an ounce, while September palladium rose 60 cents to stand at $191 an ounce.

According to the latest inventories data as tracked by Nymex, gold rose 1,256 troy ounces to $5.72 million troy ounces as of the close of business Thursday. Copper decreased 532 short tons to 17,162 short tons while silver inventories stood at 103.17 million troy ounces, up 7,332 troy ounces.

On the equities side, indexes tracking mining stocks moved higher.