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By Myra P. Saefong, MarketWatch
Last Update: 2:26 PM ET Dec. 30, 2005

Gold for February delivery closed at $518.90 an ounce on the New York Mercantile Exchange, up $1.40 for the session. The front-month contract on Dec. 30, 2004 closed at $438.40 -- that equates to a year-on-year gain of 18%, or $80.50.

Gold's current contract closed at $453.10 a year ago to log a gain of 15%, or $65.80.

Metals trading on the exchange closed by 12:10 p.m. Eastern time Friday, ahead of the New Year's holiday on Monday. Regular trading will resume Tuesday.

In the meantime, analysts remained upbeat about gold's prospects.

"Gold may be going out quietly on the last day of 2005, but if you think 2005 was noisy, just wait and see 2006," said Peter Grandich, editor of the Grandich Letter.

"Strong physical and investment demand, increasing geopolitical concerns here and abroad and the likelihood of a resumption of the bear market in the U.S. dollar are all factors that should drive gold towards its all-time highs," he said.