"There were not too many market participants in today, and so there's a bit of book squaring," said Paul McLeod, vice president of precious metals at Commerzbank.
"We ended right back on the 50-day moving average, so we'll see how it breaks in the New Year." The market should stay volatile into 2005, but gold's upward trend is likely to continue after prices rose nearly 6 percent this year, McLeod added.
"I don't think the Bull Run is over, but it's looking a little tired out. I think next year we will see higher highs but not yet a $500 price," he said. "I think $470 is a good high to shoot for."
On the Comex division of the New York Mercantile Exchange, gold for February delivery rose $1.40 to $438.40 an ounce, within a session range of $434.70 to $439.80.
Estimated turnover was a quiet 23,000 contracts, versus volume of 64,000 on Wednesday, when February gold slid as low as $434.40, its cheapest since December 10. "It's very quiet and there's no real follow-through liquidation," one desk dealer said during trading.
New York metals will be shut on Friday in observance of New Year's Day, which falls on a Saturday this year.
Trading sources have said the tsunamis that killed at least 120,000 people across the Indian Ocean coastline from Indonesia to Africa sparked limited safe-haven buying in gold this week because investors, especially those in earthquake-prone Japan, were already on holiday.
Gold is used for investment for future sales in times of trouble as well as for jewellery and adornment. In the foreign exchange, the dollar weakened after a below-consensus snapshot of regional US business activity kept it under selling pressure.
The euro rose to $1.3625 in late trade, not far from Wednesday's record high at $1.3646. Gold tends to move in opposition to the dollar as many investors use the metal as an alternative to the greenback.
Most currency traders believe the dollar's downtrend is intact and, therefore, the Europe's Bull Run should have further to go in 2005, which in theory should bolster gold prices.
Funds chased Comex gold to a 16-year high at $458.70 this month as the dollar fell on worries about economic growth and ballooning US current account and budget deficits.
Spot gold priced at $437.20/7.70 an ounce, above on Wednesday's New York closing quote at $435.30/6.05.
On Thursday's afternoon fix in London was at $435.60. March silver rose 1.0 cent to end at $6.837 an ounce, trading $6.80 to $6.885. Spot was indicated at $6.79/82 versus $6.77/6.80 previously.
Front-month January platinum rose $1.20 to $863.70 an ounce. Next active April futures dipped 30 cents to $859.70. Spot platinum was at $856.50/861.50.
Thinly-traded March palladium eased 40 cents to $185.25 an ounce. Spot traded to $182/188.