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Copper Keeps Run Going

Gold futures are little changed at $681.40 an ounce.

There was no shortage of action in the metals complex Wednesday, with copper prices continuing to soar and talk of a big buyout in the gold patch.

May-dated copper contracts were rising 5 cents at $3.58 a pound on the Comex division of the New York Mercantile Exchange. Prices for the metal are now up almost 50% since early February.

The

PowerShares DB Base Metals

(DBB) - Get Invesco DB Base Metals Fund Report

exchange-traded fund, which tracks copper and other industrial metals, was ahead 1.7% in recent action.

"I don't think there is any end in sight for the rally," says Neil Buxton, managing director at GFMS Metals Consulting in London.

The key factors that have driven the market the last two months, such as tight supply and burgeoning imports in to China, are still very much in force, he says. Hot institutional money is also helping fuel the price spike and will likely continue to do so for a while, he adds.

"Speculative interests see that we've been above $4 a pound last year and are likely asking, 'why shouldn't it go there again?'" says Buxton.

Other metals insiders report that the force of the rally over the past few weeks has caught some market participants off guard.

Anyone foolhardy enough to sell copper futures short during the price surge has "received immediate punishment," says Mo Ahmadzadeh, president of Mitsui Bussan Commodities in New York.

Copper producers

Freeport-McMoRan Copper & Gold

(FCX) - Get Freeport-McMoRan, Inc. Report

and

Southern Copper

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(PCU)

were up 0.3% and 1.3%, respectively, battling softness in the broader indices.

Lately, the

Dow Jones Industrial Average

was losing 67 points at 12,507.

Turning to the precious-metals patch, shares of South Africa's

Gold Fields

(GFI) - Get Gold Fields Ltd. Report

rose more than 7% earlier on news from

Bloomberg

that financier Edward Pastorini was working with a group of investors to purchase the miner.

The article indicated that the buyout offer would likely be a mixture of cash and stock and could come as soon as June.

Still, at least one observer remains skeptical.

"I question how he could pull off a complicated deal like that," says Joe Foster, gold strategist at New York-based money manager Van Eck. He says the big question is: "Can this group of investors come up with a premium that would make Gold Fields' shareholders happy?"

The initial strength in Gold Fields was quickly pared back, and the stock was recently gaining 3.3%. The Amex Gold Bugs Index was lower by 0.3%, but shares of component stock

Eldorado Gold

(EGO) - Get Eldorado Gold Corporation Report

were bucking the trend, up about 0.5%.

Making news elsewhere was miner

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report

, which after recently completing its purchase of

Bema Gold

, increased its production forecast to 1.65 million ounces of gold for this year. Previously, Kinross figured its output would be 1.5 million ounces.

However, the company also said unit production costs would likely be up to 6% higher during the same period. The stock was off 0.5% recently.

Action in gold futures was relatively quiet, with June-dated contracts barely changed at $681.40 an ounce on the Comex. The bullion exchange-traded funds which hold the metal,

iShares Comex Gold Trust

(IAU) - Get iShares Gold Trust Report

and

streetTracks Gold Shares

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, were slightly lower, off 0.2% and 0.1%, respectively.

Overseas, the European Central Bank said it sold 189 million euros of gold and receivables last week, or almost 12 tons.