Gold soared Monday, but as the precious metal rose past $400 an ounce, some traders questioned how long the run-up would last.
"Gold is starting to get a little pricey," said one trader. "I think it can still move higher, but I would only go long lightly. I would not be an aggressive buyer."
Spot gold rose $8.30 to $405.20 an ounce, while the actively traded December contract was up $8.10 to a five-month high of $414 when trading was halted on the Commodity Exchange because of a fire that cut power to much of lower Manhattan. Comex officials said Monday's closing prices for gold would not be determined until the close of trading today.
Silver, meanwhile, jumped to $5.145 per ounce, up 17.6 cents from Friday's close. Silver has lagged gold recently.
Since Iraqi troops invaded Kuwait on Aug. 2, spot gold has risen $31.90, or 8.5%. Typically investors buy gold during times of world tension because they see the metal as a safe haven.
Gold prices also climb with rises in oil prices, which are seen as a sign of inflation. Crude prices were higher Monday before the power outage brought trading to a halt.
But many traders think that gold has reached a short-term peak.
"We've had a tremendous run these past two weeks, let alone the last two days," one trader said. "I think the days of more two-sided activity are not too far off. That is, unless a shot is fired."
Technical analysts agreed that December gold probably would encounter resistance at $417 and $420 before coming up against a barrier at $425.
Traders said the bulk of gold's run has been tied to the crisis in the Persian Gulf and fears that the military conflict could heighten in days to come, with troops from the United States and other nations pouring into the region.
Most analysts had expected gold prices to tail off Monday because no shots had been fired over the weekend. But tension remained high in the region, so gold continued to roar.