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 was popping $12.70 to $1,261.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,262 and as low as $1,243.10. The U.S. dollar index was slipping 0.07% to $85.62 while the euro rose slightly to $1.238 versus the dollar. The spot gold price Friday was adding more than $14, according to Kitco’s gold index.

Gold prices were conquering new highs after settling at a record high Thursday of $1,248 an ounce. Fridays in the summer typically lead to more volatility in gold as volume thins and traders have been opting for cash and gold over other assets to protect themselves against a weekend where anything can happen. Friday could be especially volatile with quadruple witching forcing traders to repurchase or sell their options contracts before they expire.

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Investors will continue to put Spain in the spotlight Friday as International Monetary Fund managing director, Dominique Strauss-Kahn, is set to pay Spain’s prime minister a “visit,” which has fueled speculation that Spain will have to tap the IMF and European Union for a bailout as its credit markets dry up. Spain’s recent successful bond sale however cheered gold investors who were reassured that the IMF or ECB would not be forced to sell gold to raise cash to help EU nations.

The EU reportedly will release the findings from the bank stress tests. Any more negative headline news from the eurozone 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 that 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 supporting exploding gold prices. The popular gold exchange-traded fund, SPDR Gold Shares, added almost 2 tons Thursday as investors piled into gold despite prices nearing record highs.

Silver prices were adding 32 cents to $19.01 while copper was flat at $2.89 weighed down by the World Bank’s prediction that China’s economy could slow this year and next after popping 11.9% in the first quarter of 2010. China has been credited with jump-starting the global economic recovery and investor fear that any tightening in spending will hurt demand for base metals used in construction.

Gold mining stocks, a more risky and more profitable way to invest in gold, were rising. AngloGold Ashanti was adding 0.62% to $45.08 while Yamana Gold was popping more than 3% to $11.04. Other large miners Randgold and Gold Fields closed higher at $94.75 and $14.19, respectively.

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