Gold touches record $1,637.50 an ounce as GDP disappoints

Gold for December delivery GC1Z +0.61%  added $10.80, or 0.7%, to trade at $1,627 an ounce on the Comex division of the New York Mercantile Exchange.

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It earlier traded as high as $1,637.50 an ounce, a new intraday record. So far this week, gold has gained 1.6%.

“It’s about safety,” said Frank Lesh, a broker and futures analyst with FuturePath Trading. “People are escaping from currency volatility out there (and) political instability.”

Monthly gains for gold hover around 8%, as the most-active gold contract ended June at $1,502.80 an ounce.

Gold last settled at a record on Tuesday, when it ended at $1,616.80 an ounce over the wrangling on legislation to deal with raising the U.S. debt ceiling and cutting the deficit.

Silver tracked gold but other metals declined. September silver SI1U +0.27%  added 18 cents, or 0.4%, to trade at $39.97 an ounce. So far this week, silver has declined 0.4%. Monthly gains, however, have surpassed 14%.

September copper HG1U +0.21%  , which had been gaining ground all week on a mine strike in Chile, buckled 4 cents, or 0.9% to $4.43 a pound.

Copper on Thursday settled at its highest in three and a half months as the labor impasse at Escondida, the world’s largest copper mine, reached a week.

In addition, Chile, the world’s top copper producer, has reported a drop in production in June, analysts at Commerzbank said in a note Friday. Output fell 8.5% year-on-year to 426,500 metric tons, they said.

“The reasons for this were strikes at various mines, poor weather and power outages, and they are likely to have hit July production substantially as well,” the analysts added.

Copper also felt the pinch of slower-than-expected U.S. output growth. U.S. gross domestic product rose 1.3% in the second quarter of the year, below the 1.6% rate that economists had expected. Read more about second-quarter GDP.

The Commerce Department also said the recession in the U.S. had been even deeper than previously thought. See more about the recession's data revision.

Adding to woes -- and boosting gold’s safe-haven status -- U.S. lawmakers late Thursday postponed a vote on the debt-limit.

The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk to begin defaulting on its obligations.

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