Gold gained more than $1 an ounce in Asia on Thursday but was stuck in a tight range ahead of a long holiday weekend in the United States.
Gold was pausing for breath after rising to an 18-year high of $495.35 an ounce on Tuesday and dealers said fund managers were still keen to push up the price to $500, a level last seen in 1987.
US markets will be closed on Thursday and Friday for the Thanksgiving holiday. Spot gold rose to $493.40/493.90 an ounce in afternoon trade from $491.70/492.50 last quoted in New York on Wednesday, when it fell more than $2 on fund selling.
It had touched a low of $492.25 an ounce in Asia before a rebound in Japan lifted the price. The key October 2006 gold contract on the Tokyo Commodity Exchange rose 2 yen to 1,903 yen per gram but off a 15-year high of 1,918 yen hit on Tuesday.
"The market will be taking some rest at around the $490 level before it decides where to go next. We may see $500 next week or beyond that, depending on peoples' interest to build up positions," said one dealer in Singapore.
Fund managers have shown a keen interest in gold amid worries about the impact of high crude oil prices, inflation, the US economy and geopolitics.
The physical sector continued to see the sale of gold bars from Hong Kong, Indonesia, Singapore and Thailand as investors cashed in on gold's recent rally.
"We see a lot of selling back of jewellery and scraps," said Beh Hsia Wah, a dealer at United Overseas Bank in Singapore, adding that fresh buying interest was likely to emerge at $489-$490.
In other precious metals, platinum rose to $981/985 an ounce from $972/976 late in New York, aided by renewed fund buying in Tokyo platinum futures.
Sister metal palladium rose to $257/261 from $251/255 late in the US market, and silver edged up to $8.12/8.15 an ounce from $8.11/8.13 late in New York.
On Hong Kong's Chinese Gold and Silver Exchange, gold rose to HK$4,554 per teal (37.5 gram ingot) from HK$4,550.
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