NEW YORK ( TheStreet ) -- Gold prices hit a new record high Friday as investors fled into gold as a safe-haven asset.

Gold for August delivery settled $9.60 higher to $1,258.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,263.70 and as low as $1,243.10. The U.S. dollar index was slipping 0.01% to $85.68 while the euro fell slightly to $1.237 vs. the dollar. The spot gold price Friday was adding $12, according to Kitco's gold index.

Gold prices conquered new highs breaking their old high of $1,248 an ounce. Fridays in the summer typically lead to more volatility in gold as volume thins and traders shift into cash and gold to protect themselves against a weekend where anything can happen. Friday was also quadruple witching, which forced traders to repurchase or sell their options contracts before they expire.

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But gold's big rally can't just be explained by technical buying and options expiration. One theory is that Spain's successful bond sale calmed investors who were worried that the IMF and ECB would be forced to sell gold to raise cash. Another is that big central banks from emerging market countries like China and India are buying gold. Iran recently said it would be selling €45 billion for U.S. dollars and gold. The final theory is safety. Gold is bought as the ultimate safe-haven asset to hedge against a flailing equity market.

Investors will continue to put the health of Spain in the spotlight. International Monetary Fund managing director, Dominique Strauss-Kahn, said Friday he had complete confidence in Spain's economy as rumors circulated that his "visit" meant that that the country will have to tap the IMF and European Union for a bailout as its credit markets dry up.

The EU reportedly will release the findings from the bank stress tests in July. Any more negative headline news from the results could squash the euro's recent rally and most likely prompt another flight to safety into gold.

Summer months typically are hard on gold prices as physical demand wanes from key consumers like China and India. Gold bugs usually have to wait for India's fall wedding and festival season for higher prices. Some analysts think that if gold can hold up and continue to settle higher during the summer, a violent move higher will follow.

"That's when you're going to see the shorts throw in the towel, people add on, and that's when we'll get that $1,400, $1,500, $1,600 an ounce," says Scott Redler, chief strategic officer for T3Live.com.

Over the short term, analysts expect the battle between profit-takers and gold-buyers to heat up. "We expect investors will continue to view dips as a buying opportunity," says James Moore, analyst at theBullionDesk.com in his daily metals report. In the meantime momentum buying is supporting exploding gold prices. The popular gold exchange-traded fund, SPDR Gold Shares ( SPDR), added almost 2 tons Thursday as investors piled into gold despite prices nearing record highs.

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