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Gold Closes In on $700

June-dated bullion contracts add $8 at $696.30 an ounce.

Gold and silver prices were rising Friday as bullish investor sentiment spilled over from the base-metals complex and platinum.

June-dated bullion contracts were adding $8 at $696.30 an ounce on the Comex division of the New York Mercantile Exchange. Silver contracts were tacking on 23 cents at $13.96 an ounce.

The gold and silver exchange-traded funds

streetTracks Gold Shares

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iShares Silver Trust

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were climbing too, 1.6% and 2.4%, respectively.

"Gold seems to be playing catch-up," says Robin Bhar, a precious-metals strategist at UBS in London, noting that rallies in platinum and base metals prices earlier this year have left gold bullion in the dust.

Since March 5, benchmark prices for copper have surged about 35%, while spot gold prices are up only 8%. Platinum has also seen something of a jump, rising 11% during the same time.

For copper, the driving factor has been rising imports into China. In platinum, news that two ETFs are being established in Europe for the metal has sparked renewed investor interest in the metal.

The higher prices for industrial commodities also play into fears of inflation for retail goods in the wider economy, therefore boosting demand for gold as an inflation hedge.

From a technical analysis perspective, one chart watcher believes sparks could fly as the price of gold nears the psychologically important $700-an-ounce level.

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" So far we are seeing resistance," says Larry Levin, president at Chicago-based

. "But a lot of people have been shorting this market, and some are now getting nervous as the price approaches $700."

As the jumpy shorts cover their positions, the buying pressure could push gold higher, says Levin. He notes that because the price of gold has rarely been so high, it's difficult to predict how prices will behave.

"This is relatively uncharted territory, and that's when the markets are most exciting," Levin says.

Turning to the miners, Matrix Research raised its rating on silver producer

Hecla Mining

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to a hold rating from sell, sending the stock 4.5% higher.

In ferrous metals, UBS hiked its stock price target on

Reliance Steel

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to $66 a share from $54 and reiterated a buy rating, after news after the close Thursday that the company's first-quarter profit had bested analyst forecasts.

The shares were recently rallying 5.8% at $60.