NEW YORK — The price of gold rose above $500 an ounce for the first time since 1987 yesterday, extending a rally that has defied market tradition and perplexed some traders and money managers.

Gold for February 2006 delivery closed at $503.50 an ounce in regular New York trading yesterday, up 20 percent over the past six months.

Investors traditionally pile into gold as a safe haven when the dollar drops, inflation rises and economic calamity looms. But none of those things appears to be happening.

So why is everyone so bullish on bullion?

Answers from commodities traders and money managers vary. Among the most popular is that oil-rich countries in the Middle East are using gold as a new place to park some of their vast energy profits, while central banks in Asia and elsewhere are diversifying foreign reserves by moving money into gold. Russia, South Africa and Argentina also may increase their gold reserves.

"A number of second- and third-tier central banks have examined their assets and decided that they are a little light on gold and perhaps they should go pick some up," said Dennis Gartman, an economist and editor of the Suffolk, Va.-based Gartman Letter, which analyzes investment trends.

Gartman said gold prices probably have peaked, at least for the moment. But he expects gold to go higher in the long term, given the growing worldwide demand for all kinds of commodities. Gold production also has been dropping. Output in South Africa, the world's largest gold producer, fell 15.4 percent in the 12 months ended in September, the biggest drop in nine years.

But Richard Bernstein, chief U.S. strategist at Merrill Lynch & Co., said the surge in gold prices is not based on fundamentals of supply and demand. "People have to remember that the No. 1 player in all commodities right now is hedge funds," he said. "It's all speculation. In gold, it's an inflation trade. Hedge funds are long gold and short Treasury notes."

Gartman said: "If somebody is thinking of investing in gold right now, I would tell them to go sit down, have a cup of coffee and take a deep breath because I wouldn't be surprised to see gold back down to $400 or $450 by the end of the year."