The gold price bubble burst today, at least temporarily, as prices slid $46 an ounce in London and dropped sharply in other European markets as well.

But the price recovered in New York, amid reports of fresh disturbances in Afghanistan, then slipped again in late trading. Gold closed at $603.10 in New York, above London's $588 afternoon fixing, but below its $625 Thursday close.

"It was pick a time, pick a place today," said one weary New York trader.

In light currency trading, the dollar gained against most major currencies except the yen.

After rocketing up steadily for several weeks -- only a week ago it was $515 an ounce and a month ago $430 -- gold prices slipped slightly in late Thursday trading.

"Apparently some middle-sized traders figured the boom was off and came in to take profits," said Fred Bogart, senior vice-president of Republic National Bank. Rumors of a big sale of gold by the U.S. Treasury also helped drive down gold prices in Europe, although the treasury refused to comment on the rumors.

Silver prices fell for the second day in a row in New York, closing down $1 an ounce at $36.10. Silver fell $1.75 an ounce Thursday.

The price of silver has been rising faster than that of gold in recent weeks, however. Only a month ago it was less that $19 an ounce and a year ago it was less than $6.

Experts blame the Soviet invasion of Afghanistan and the general political instability in the Middle East as the source of the gold price explosion. But no explanation seems to adequately explain what has driven the price up $200 an ounce in a month.

For one thing, no one knows for sure who is buying the metal. Most big purchasers use agents -- such as Swiss or German banks -- to buy the gold, leaving the purchaser unidentified.

Most experts say that wealthy Middle Eastern investors -- from countries such as Saudi Arabia and Kuwait -- are buying the gold and holding on to it as insurance. These investors are worried about the stability of their own regimes and are squirreling away gold -- historically the refuge of scared investors.

Although many Americans have been buying small quantities of gold, experts say that the United States is not an important source in the gold price surge. Even on the New York market, the big buyers are foreign, experts say.

As gold prices leapt upwards, there were few offers to sell -- while willing buyers were legion -- in either the United States or European markets for most of the week. In Paris, gold trading was halted Wednesday for lack of sellers.

But today, Paris stockbrokers shut down gold trading for 45 minutes because of a wave of sell orders. Experts say that all across Europe, some gold holders unloaded their holdings in order to take profits, driving the price down in the process.

"Who's taking the profits? Well, besides the little guy who is buying and putting it away and the big guys who are buying it and holding onto it, there's a middle level of gold traders who haven't been active in the last few days," said Republic National's Bogart.

"Assume they bought it at $400 or $500 an ounce. Well, the market kept going up, so why should they sell?"

But on Thursday, he said, gold prices closed down slightly from their peaks of the day (although well above their peaks of Wednesday). These middle-level traders figured the price rise was over and began to sell.

After a couple of hours of trading in New York, however, "fresh buying orders started coming in again. It's scary. Markets shouldn't behave like this. The price shouldn't swing $50 a day. But in those volatile markets you get big gaps. There might be big willing buyers at $580 but no willing sellers until $620," he said.

"You figure it out, I can't," one puzzled trader said.

In foreign exchange markets, the dollar gained against the West German mark, the Swiss franc and the British pound, while declining against the Japanese yen.

In Frankfurt, the dollar was fixed at 1.7155 marks, compared with 1.7062 Thursday and 1.7119 in late New York trading Thursday. The dollar gained in late Thursday trading after several European central banks stepped in to buoy the U.S. currency.

In Zurich, the dollar closed at 1.58 francs, compared with Thursday's 1.5710. In London the pound was quoted at $2.2340 compared with $2.2350 Thursday.

In Tokkyo, where foreign exchange trading resumed after several days of holiday, the yen was quoted at 237.45 to the dollar, compared wiht 238.8 in late New York trading Thursday.