US gold futures closed up slightly but below the prior 16-year peak on Thursday, as investor interest was dulled by a steady dollar in holiday thinned trade, dealers said. December gold on the New York Mercantile Exchange's Comex division finished at $435.40 an ounce, up 90 cents, after moving between $432.50 and $436.20. Estimated turnover was 40,000 contracts. Veterans' Day in the United States and Canada's Remembrance Day on Thursday left trading conditions quiet, dealers said.
As the dollar stuck near even, gold consolidated following its volatile session on Wednesday leading up to the Federal Reserve's decision to raise benchmark interest rates by 25 basis points, as was widely expected by financial markets.
An overall weak greenback against the euro, however, has propped up dollar-denominated gold by making it cheaper in foreign currencies.
"The euro is stuck in a range around $1.29 and gold is stuck with it," one gold trader at an international bank said.
The euro was worth $1.2912, versus $1.2882 late on Wednesday and its all-time high at $1.3005.
Investors turn to gold as a haven due to economic uncertainty and geopolitical worries, recently heightened by fighting in Iraq and the death of Palestinian leader Yasser Arafat.
On Wednesday, gold futures peaked at $438.30, the highest price for an active futures contract since July 1988.
"The Hindu Dowel and Muslim Eid-ul-Fitr holidays will slow some physical demand over the next couple of days, but good scale-down support should continue to be found from $430-425, while $440 still appears to be the market's upside target," said thebulliondesk.com in a daily note.
Spot gold was last at $434.35/5.10 an ounce, up from $432.75/3.50 at the New York close on Wednesday and that same session's 16-year high at $437.25.
On Thursday's afternoon fix in London was at $433.80.
Comex December silver rose 5.7 cents to $7.477 an ounce, trading from $7.405 to $7.49. Spot traded up to $7.43/46 from $7.34/37 previously.
The fix was $7.415. Nymex January platinum gained $5.70 to $854.60 an ounce.
Spot platinum went up to $850.50/855.50.
December palladium advanced $1.10 to $216.15 an ounce.
Spot palladium touched $212.00/217.00.
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