New York gold futures were buoyant in early trade on Tuesday, with traders confident of further gains but wary of thin trading conditions in the last few sessions of 2005.
"There's no reason for long-term investors to get out. Short-term guys are probably just waiting 'til the holiday lull is over," said a desker at a bullion trading firm. "The major players are going to try to bully this thing around, but you would imagine volumes are thin."
At 9:43 am EST (1443 GMT) at the COMEX division of the New York Mercantile Exchange, gold for February delivery was up $1.60 at $507.70 an ounce, having touched $505.80 and $511.40 overnight in ACCESS screen trade.
Bargain hunters - investors and physical consumers - emerged on Monday after last week's 4.8 percent shakeout from a 25-year peak at $544.50 an ounce last Monday.
The market remains bullish about diversification into commodities. Japanese investors are buying gold for yen and there has been interest reported in the Middle East to convert dollars earned from crude oil profits into gold.
Spot gold was trading at $505.00/5.80, up from New York's close at $503.30/504.10 an ounce. Tuesday's morning fix in London was at $505.75.
March silver futures were down 1.0 cent at $8.635 an ounce, trading from $8.605 to $8.71. Prices rose to their highest levels since 1987, above $9 per ounce, last week.
Spot silver fetched $8.54/57, up from $8.55/58 an ounce late Monday. Tuesday's fix was at $8.55.
In NYMEX futures, January platinum was down $9 at $968 an ounce. Platinum futures hit a near 26-year high at $1,026 last Monday. Spot platinum was quoted at $960/965, down from $972/976.
March palladium was off $2.75 at $263. Spot fell to $255/259 from $260/264.