UPDATE 4-CopperLONDON, Oct 7 (Reuters) - Copper prices hit a new record peak of $3,926 a tonne on the London Metal Exchange (LME) on Friday, extending gains since the start of the year to 24 percent as fund buying of the metal persisted.
Despite calls that copper's ascent is becoming precariously Icarus-like, prices have been setting fresh records almost daily over the past two weeks on the world's biggest metals market.
"Copper is surprising a lot in the industry with its endless new highs," Mark Keenan, fund manager with MPC Commodities Fund, said.
"It seems fairly robust and the volatility of the upmove and the trend hasn't changed much.
"Typically, if you do start seeing a massive change in volatility that can signify a top. We're not really seeing that."
Benchmark LME three-months copper was now targeting $4,000 a tonne. It closed open-outcry trade at 1600 GMT at $3,915, up $32 from the previous day's close.
"The mood is now looking beyond $3,900 to a challenge of $4,000 as the drop in exchange stocks has really boosted the bulls apart from the other supply disruptions," a trader said.
At the COMEX division of the New York Mercantile Exchange, copper for December delivery surged 2.55 cents, or 1.43 percent, to end at $1.8085 a lb, after dealing from $1.7760 to a new life-of-contract peak at $1.8090.
For the week, the benchmark December contract gained almost 4.7 percent.
Spot October settled 2.55 cents firmer at $1.9005 after hitting an all-time high for the spot contract at $1.9020.
Copper, used in construction and electronics, has soared this year as world supply has failed to keep up with demand that has been inflated by heavy buying from China.
Analysts had expected a dip in the second half of this year, but have been frustrated by the failure of new copper supply to come on stream as expected and by production problems and labour disputes at key mines in areas such as North America and Africa.
"The majority of people think copper is far too high, but you cannot short it. That has been tried and failed since $3,500," a source at a systems-based fund said.
"The systems funds are all long -- what we're are seeing is residual buying now as it is still dragging money in," he said.
Analysts polled by Reuters at the start of the year had forecast cash copper prices to average a median $2,712 in 2005, which they then revised up to $3,166 in a July update to the survey.
Cash copper is currently trading around $4,072 and its average so far this year is $3,489.
Keenan said the market was really starting to attract widespread interest.