Gold Kisses $600, Retreats

Updated from 1:49 p.m. EDT

Gold touched another 25-year high at $600 an ounce on Thursday, leading other metals to new territory.

The precious metal again found its momentum from rising crude oil prices, which gained 87 cents to $67.94 a barrel after touching a two-month high of $68.20. Crude rose after U.S. data sparked concerns that refiners won't be able to meet gasoline demand for the summer driving season.

Gold for June delivery finished at $599.70 an ounce, up $7.20, after touching a high of $601.9 earlier in the session. Silver closed at $12.045, up 3.4 cents, after touching a 22-year high of $12.08. Copper, meanwhile, rose to another all-time high of $2.646, adding 5.05 cents.

"We're feasting," says Peter Grandich, metals analyst and editor of the Grandich Newsletter.

After racing through $500 in November, gold has tacked on another $100, a 20% increase, in just four months. That's an impressive move which has even gold bugs declare the precious metal currently in overbought territory. But gold had taken a breather along the way. After hitting $580 in February, it slumped back to $540 in March before powering ahead towards $600.

"We can stay in overbought territory for much longer than normal," Grandich says. "It might seem as if it's out of hand but that's what happens in secular bull markets."

Grandich, however, is not as bullish on copper and silver, whose prices have gone up in a straight line and haven't shown the same self-correcting behavior seen in gold last month.

Gold bears, meanwhile, are eyeing the next line of resistance at around $650-$675 an ounce. "That's their last line of defense," Grandich says. When gold last went through $650 in 1980, it then jumped to $850 in just a few weeks.

But a correction could be seen before $650 is even tested. Among other factors, it might be sparked by silver, according to Grandich. Silver, which is soaring in anticipation of the launch of a silver exchange-traded fund (ETF), may well correct sharply when the ETF launches, says Grandich. The ETF, which would be similar to the streetTRACKS Gold (GLD) ETF, is still undergoing regulatory review.