Updated from 2:34 p.m. EDT
Gold and metals continued their seemingly unstoppable rally on Tuesday, supported by a weak dollar, the rising price of crude oil and ongoing tensions over Iran's nuclear ambitions.
Gold for June delivery jumped up $7.20, or 1%, to $667.40 an ounce, after earlier touching yet another quarter-century high at $669.30.
"We believe that the yellow metal remains on a bullish trend continuing to draw support from concerns over Iran's nuclear program and the weakening of the U.S. dollar," writes Frederic Panizzutti, metals analyst at MKS Finance in Geneva.
Among other metals, silver for May delivery gained 24.8 cents to $14.10 an ounce. May copper, however, dropped 4.30 cents to $3.41 a pound.
said on Tuesday it plans to triple production at its Andacollo copper mine in Chile. The new deposit at the mine could produce 68,700 metric tons of copper a year, according to
Meanwhile, tensions in the standoff between Western countries and Iran, the world's fourth-largest producer of crude oil, continue to fuel the prices of both crude oil and gold. The precious metal acts as a hedge against inflation and as a safe-haven asset amid geopolitical uncertainties.
The five permanent members of the United Nations Security Council -- the U.S., the UK, France, Russia and China -- are meeting in Paris on Tuesday to decide whether to impose sanctions on Iran, which has refused to bow to demands to stop its nuclear program.
The Security Council is planning a "stiff international message" for Iran that may include use of armed force, the U.S. undersecretary of state for political affairs, Nicholas Burns, told reporters in Paris.
But Iranian foreign minister Manuchehr Mottaki on Tuesday said that both China and Russia have assured Iran they are opposed to sanctions, according to
United Press International
Over the weekend, Iranian deputy oil minister M.H. Nejad Hosseinian said he didn't believe the U.N. would impose sanctions because that would boost oil prices to "very high" levels. In recent action, crude oil was gaining $1.05 to $74.75 a barrel.
Meanwhile, ongoing dollar weakness is also providing strong support for gold and other metals. A weak dollar raises the value of dollar-denominated commodities, such as gold, as it takes more of the currency to buy the same amount of the commodity.
On Tuesday, the dollar fell near an 11-month low against the euro, after strong manufacturing data in the euro zone boosted expectations that the European Central Bank will continue to lift interest rates this year.
At the same time, the
is widely expected to at least soon pause its 22-month-long campaign to raise interest rates, going by Fed Chairman Ben Bernanke's congressional testimony last week.
said that Bernanke told a reporter over the weekend that markets had misunderstood his remarks and that he didn't want to send dovish signals. The report had followed strong U.S. economic data.
Still, the markets' "conclusion is that not only did the U.S. economy have a strong April, so did almost all of the rest of global economy," writes the ABN Amro economics team, which expects the dollar to remain weak.
Meanwhile, shares of metal-mining companies continued higher, tracking the rising price of metals. The Philadelphia Gold and Silver index was recently up 0.9%, the Amex Gold Bugs index was gaining 0.7%, and the CBOE Gold index was higher by 1.0%.
Among the biggest gainers,
was up 3.8%,
was up 4.6%, and
Agnico Eagle Mines
was up 2.5%.
said net earnings rose 90% in its fiscal third quarter from the previous quarter, even if production fell below expectations in its South African operations. Its shares were recently down 0.1%.
In a conference call with analysts, the Johannesburg, South Africa-based company said it also expected lower production -- due to lower-grade ore mined -- and high operating costs -- such as energy and steel -- to affect next quarter's results.
"As you can see, gold is roughly $100 an ounce higher than in the previous quarter," said CEO Ian Cockerill during the call. "There is substantial upside potential in the upcoming quarter."
For the same reason, MorningStar analyst Parvathy Krishnan says she is now bullish on South African producers, such as Gold Fields,
These producers had been unable to benefit from rising gold prices so far because of strength in the rand, South Africa's currency; higher raw-material costs; and strong labor unions pushing for wage increases.
"As a result, costs increased faster than gold prices, and the companies were forced to restructure their operations and implement cost-cutting measures," leading to a 13% drop in South African gold production in 2005, Krishnan wrote in a note.
Meanwhile, aluminum prices at 18-year highs helped
report first-quarter earnings that more than doubled from the year earlier, easily topping analysts' forecasts.
But the Montreal-based company's first-quarter sales, which rose 7% from a year ago, missed the $5.7 billion Thomson First Call estimate.
In recent action, shares of Alcan were losing 2.3%, after rising 35% so far this year.
Tuesday, new Alcan CEO Dick Evans said he wasn't surprised by Tuesday's drop in the stock. "We've had a strong rise over the past few weeks, months and year
... and people are taking profits," he said.
He also reiterated bullish forecasts for aluminum, based on estimates of a global supply aluminum deficit of 300,000 tons this year, and continued strong demand from areas such as building materials.
Shares of Idaho-based miner
were recently losing 6% amid concerns over its operations in Bolivia.
Bolivian President Evo Morales, who announced Monday the nationalization of the country's gas projects, is also planning the same for Bolivia's vast mining industry, which includes gold and silver projects.
"This is just the start ... tomorrow or the day after it will be mining, then the forestry sector, and eventually all the natural resources for which our ancestors fought," Morales said on Monday, according to
Apex Silver Mines
, which is developing a 100%-owned San Cristobal silver-zinc-lead project in southwestern Bolivia, were recently plunging 16.9%.
On Tuesday, the company issued a statement in which it said it wasn't aware of any plan by the government of Bolivia to nationalize the mining industry. "Apex Silver was particularly encouraged by recent statements made by the Bolivian Minister of Mines and Metallurgy in which he emphasized that 'the mining policy does not contemplate nationalization and even less incorporation of private companies such as San Cristobal'," it said.