The buying was fuelled by a mix of renewed speculative interest in commodities and an improved technical picture for the metals, which sparked short covering as the dollar pulled back against the euro, dealers said.
December delivery gold climbed $2.60 to $475.60 an ounce on the New York Mercantile Exchange's Comex division, its highest settlement since October 17, after dealing between $471.90 and $477.80.
Dealer buying initially lifted gold before fund interest quickly emerged afterward, but despite the rise, prices stayed capped by chart resistance around $480 and also by modest demand for bullion in the physical market, trading sources said.
"We saw fund buying this morning on the back of the durable goods number being weak, and then there was a little liquidation on profit taking later in the day," said Andy Montana, director of precious metals at ScotiaMocatta in Toronto.
"Gold certainly today was tracking the US dollar versus the euro more closely than it has of late, so we had a choppy market on both the currencies and the metals," he added.
"It's somewhat of a technical move, and a continuation of the short covering we saw on Tuesday, when it broke above the $470 level," said a broker at a futures commission merchant in New York.
"But I think it's also a resumption of a bull market." More investors are paying attention to commodities as a way to diversify portfolios, analysts say, due to high energy prices, uncertainty about the US economy and heightened international tensions.
Gold may also have gotten a lift as investors sought safe havens after the dollar fell broadly, hitting a two-week low against the euro, and as equities declined.
Those moves were triggered after the Securities and Exchange Commission subpoenaed General Motors Corp, the world's largest automata, as part of an investigation into GM's accounting practices. Dollar-denominated gold typically rises when the greenback falls, as it gets cheaper for holders of foreign currencies.
Precious metals consultant GFMS Ltd, said gold was likely to reach $500 in the first half of 2006 and probably stay higher than the current range.
Comex gold hit an 18-year high at $483.10 an ounce on October 12 and bullion reached a similar peak that day, at $480.25.
Estimated gold volume was 46,000 lots, against on Wednesday's official tally of 44,871 contracts. Open interest rose 5,131 lots to 344,519 lots on October 26.
Spot gold last fetched $473.50/474.30 an ounce, from the last New York level of $470.30/1.00. On Thursday's afternoon fix in London by bullion dealers hit $474.40.
Platinum surged to an almost-26-year high in London, but futures had yet to catch up to spot prices. By the Nymex close, January platinum shed $1.10 to end at $943.90 an ounce.
The day's high at $953.50 marked the highest price for futures since April 2004 on a spot continuation basis. Spot platinum reached $936/939 in late trade, vs London's multiyear peaks of $947 an ounce. Nymex December palladium lost $1.75 to $228.95 an ounce, with the session peak of $234 the highest for futures since June 2004.
Spot palladium traded at $224/227. Comex December silver fell 2.3 cents to $7.84 an ounce, trading from $7.805 to $7.945. A pop above $7.955 would take to a price not seen in 10 months.
Spot silver edged to $7.79/82 an ounce versus on Wednesday's New York quote at $7.77/7.80. It fixed at $7.81.