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gold futures gain almost $30 for the week Gold futures gain almost $30 for the week

NY COMEX (May 6) - Futures at nearly 26-year high; copper sets record, again - Gold futures climbed Friday to tally a gain of almost $30 an ounce and close at their highest level in nearly 26 years as worry about the nuclear standoff with Iran and fresh weakness in the U.S. dollar combined to bolster metal demand.

Copper futures set a record price, closing 8.5% higher for the week on tight global copper supplies.

Gold for June delivery rose to a high of $686.50 an ounce, marking an intraday level that futures haven't seen since October 1980. The contract closed up $7.80 at $684.30 an ounce.

Prices finished the session $29.80 above the week-ago closing level of $654.50, as the dollar slumped to fresh one-year lows against the euro and fell against Japan's yen. The greenback's weakness came in reaction to U.S. nonfarm payrolls growth for April that was far lower than expected. See Currencies. Also see Economic Report. "Gold prices have made new major-trend highs on each day this week, underpinned by geopolitical uncertainty and fresh waves of fund demand," said economists at Action Economics.

A lack of forward hedging by gold miners also has helped support prices, pushing the euro price of gold to a fresh record peak, they added. However, "extreme speculative account exposure" means that there's potential for a sharp correction on any gold-bearish development, they cautioned. But Dale Doelling, chief market technician at Trends In Commodities, said that the metals market is only about four and a half years into what he called a "secular bull market in commodities," adding that "the likelihood of continued higher prices in these and other commodities is quite good." "There are just too many good reasons to remain long on commodities for continued price gains -- but the most important reason is that the trends continue to gain momentum, and that's always a good thing for traders."

Commodities trader Kevin Kerr said that his new target for gold is $810 an ounce within the next two months, "if things persist as they are." If they don't, then prices will pull back to $620 and then see a steady climb higher, predicted Kerr, who's also the editor of Global Resources Trader, a newsletter service of MarketWatch, the publisher of this report. Still, "the way things have been going, though, it's anyone's guess," he said.

Copper record

July copper reached a record futures high of $3.55 per pound in New York Friday before closing up 1.4 cents at $3.4935. It ended the week up 27.3 cents. "Unless something happens in the supply/demand situation, it looks like $4 is the most likely near-term target," said Doelling. Copper eclipsed the $3-a-pound mark on April 21.

Copper got a boost late Thursday, after Mexico's general mining coordinator, Salvador Ortiz, warned that labor unrest in his country's mining industry is unlikely to be resolved in the short term, according to research firm Investec Securities.

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