The rush for gold continued to sweep across the United States and Europe yesterday pushing prices as high as $515 an ounce.

In New York, where traders shattered the $500 price barrier Wednesday, prices climbed more than $10 an ounce yesterday to $515.

Trading in Europe, which had been closed much of the week for the long Christmas holiday, quickly followed the New York price lead.

Gold closed in Zurich at $514 an ounce, up $39 from Friday, the last day of trading. In London, gold closed at $511, up $24.25 an ounce from Monday's closing.

The dollar, in the meantime, remained in decline on most overseas money markets.

The latest gold rush appears to have been triggered by the situation in Iran and the growing threat of military action in Arghanistan. Many Arab investors are believed to be turning in their currencies for gold.

James Sinclair, head of the New York bullion firm bearing his name, said yesterday that many of the gold purchases in the U.S. were being made on behalf of Arab investors. "Individuals and principals have come to the U.S. market to buy gold and indications are that many of them are actng for the Arabs," he said.

Sincliar said, "The increased political anxiety in the Middle East now has major Arab oil-producing nations more afraid of their neighbors than their customers."

Another New York dealer predicted that "nobody in his right mind will sell at these levels. They're afraid they'll never be able to buy it back."

In Europe, thaere were indications yesterday that small investors were beginning to enter the market.

But several dealers, both in New York and Europe, said yesterday that they thought the rush to buy gold had reached such large proportions that the price would hold. "The market," said one dealer, "now has become so big that this time the small investor and speculator may be right. In fact, we think the gold market now has become so big that it is impossible to kill it."

A New York dealer predicted "these high levels are here to stay." He said he believed the price of gold would eventually break and drop $10 or $20 an ounce and then take off again.

Both the rise of gold and the decline of the dollar yesterday were accentuated by the fact that trading wa light almost everywhere. "The dollar was moved around very abruptly by commercial deals, and announcements detrimental to the dollar had a very strong impact," a New York dealer said.

Closing dollar rates on overseas exchange markets included: Tokyo, 239.725 yen, up from 239.55 Wednesday; Frankfurt, 1.7140 West German marks, down from 1.7360 last Friday; Zurich, 1.5755 Swiss francs, down from 1.6095 Friday; Paris, 4.0085 French francs, down from 4.0450 Wednesday; Amsterdam, 1.8975 Dutch guilders; down from 1.8215 Friday and Milan, 804.55 Italian lire, down from 807.75 Monday. CAPTION: Picture, Geologist George Harol of New York Museum of Natural History holds 156-ounce gold nugget, valued at $586,481 when gold prices soared yesterday. Rare large nuggets are worth about three times the value of the gold content. AP; Graph, no caption, The Washington Post