Gordon was about 1,545 km west of Terceira in the Azores at 5 p.m. (0230 hrs IST) and was moving to the east-northeast at about 35 km per hour, the US National Hurricane Center said.
Gordon's top sustained winds grew from 130 kph to 145 kph but forecasters said they expected the storm to weaken in the next day.
A tropical storm watch tells residents they could see storm conditions within 36 hours.
Hurricane Helene's sustained winds dropped from 205 kph to 185 as it churned through the open Atlantic in the general direction of Bermuda, US forecasters said.
The fourth hurricane of the 2006 Atlantic storm season, still a powerful Category 3 storm on the five-step Saffir-Simpson scale of hurricane intensity, was located 1,635 km east-southeast of Bermuda, the center said.
It was moving to the west-northwest at about 14 kph and was expected to pass well to the east of the mid-Atlantic British territory by Friday, forecasters said.
The six-month Atlantic hurricane season, which began on June 1, has so far produced eight storms, of which four reached hurricane strength. The long-term average is for 10 storms a year, of which six become hurricanes.
Forecasters had initially expected 2006 to have above-average hurricane activity after 2005's record-breaking season, during which 28 storms spawned 15 hurricanes, and 2004, when four hurricanes plowed through Florida.
But forecasters say a number of weather factors have contributed to lower-than-expected hurricane activity, including Saharan dust over the Atlantic and the development of El Nino conditions in the eastern Pacific.
An unusual warming of Pacific waters, El Nino conditions suppress hurricane formation in the Atlantic by increasing the amount of wind shear, which is the difference in the velocity or the direction of winds at different altitudes.
REUTERS PDS BST0332