Why didn't Gandalf identify the troll's swords?

Question

Elrond identified the swords by their runes in The Hobbit:

Elrond knew all about runes of every kind. That day he looked at the swords they had brought from the trolls’ lair, and he said: ‘These are not troll-make. They are old swords, very old swords of the High Elves of the West, my kin. They were made in Gondolin for the Goblin-wars. They must have come from a dragon’s hoard or goblin plunder, for dragons and goblins destroyed that city many ages ago. This, Thorin, the runes name Orcrist, the Goblin-cleaver in the ancient tongue of Gondolin; it was a famous blade. This, Gandalf, was Glamdring the Foe-hammer that the king of Gondolin once wore. Keep them well!

I can't tell whether those in Gondolin used Quenya or Sindarin, but it seems very likely Gandalf could read and speak whatever language they used, and thus was on the sword. This answer describes the languages Gandalf knew, which includes them.

They even noticed the runes before bringing them to Elrond, but couldn't read them:

‘These look like good blades,’ said the wizard, half drawing them and looking at them curiously. ‘They were not made by any troll, nor by any smith among men in these parts and days; but when we can read the runes on them, we shall know more about them.’

It has always seemed odd to me that Gandalf who, in the Lord of the Rings, was a very learned loremaster, somehow didn't recognize either of these "famous blades", one of which was actually the king's sword. They needed Elrond to identify them. Heck, even the goblins in the Misty Mountains recognized them on sight:

The Great Goblin gave a truly awful howl of rage when he looked at it, and all his soldiers gnashed their teeth, clashed their shields, and stamped. They knew the sword at once. It had killed hundreds of goblins in its time, when the fair elves of Gondolin hunted them in the hills or did battle before their walls. They had called it Orcrist, Goblin-cleaver, but the goblins called it simply Biter.

This sword’s name was Glamdring the Foe-hammer, if you remember. The goblins just called it Beater, and hated it worse than Biter if possible.

They came scurrying round the corner in full cry, and found Goblin-cleaver, and Foe-hammer shining cold and bright right in their astonished eyes. The ones in front dropped their torches and gave one yell before they were killed. The ones behind yelled still more, and leaped back knocking over those that were running after them. ‘Biter and Beater!' they shrieked

Is this a continuity error because The Hobbit was written and published before the full character of Gandalf was imagined?

Answer 1

Gandalf was unable to read the runes because the swords were covered with dried goblin-blood

As first written and published in The Hobbit, Gandalf was a lot less developed, and he was indeed unable to read runes. Note the usage of "if we can read".

‘They have a good look’ said Bladorthin, ‘but if we can read the runes on ’em, we shall know more about ’em.’
_{Original draft. [The History of the Hobbit - "The Second Phase" ] (note that Gandalf was named Bladorthin in this draft)}

“These look like good blades,” said the wizard, half drawing them and looking at them curiously. “They were not made by any troll, nor by any smith among men in these parts and days; but if we can read the runes on them, we shall know more about them.”
_{1937 First Edition}

In the third edition, first published in 1966, Tolkien gave a minor tweak to this passage, changing that from "if we can read", to "when we can read". Gandalf is able to read runes, just he cannot do so right now.

“These look like good blades,” said the wizard, half drawing them and looking at them curiously. “They were not made by any troll, nor by any smith among men in these parts and days; but when we can read the runes on them, we shall know more about them.”
_{1966 Third Edition}

This change was a lot more detailed in the abandoned "1960 Hobbit" revisions, where it was said that Gandalf was unable to read them because they were covered in blood.

‘These look like good blades too’, said the wizard, half drawing the swords and examining them closely. ‘They were not made by any troll, nor by any smith among Men of these days. But there’s black blood on them, goblin-blood. When they are cleaned and the runes on them can be read, we shall know more about them’
_{1960 unused revisions [The History of the Hobbit - "The Fifth Phase"]}

In his commentary in The History of the Hobbit, John Rateliff notes the inconsistency in the original and discusses Tolkien's fix.

The trolls’ hoard is almost as interesting as its owners. Bladorthin’s inability to read the runes on the swords is a simple set-up for the scene with Elrond in the next chapter, which was thus clearly already planned. Later development of the wizard as a peerless lore-master (as in, for example, the Moria gate and ‘Scroll of Isildur’ scenes in The Lord of the Rings) created a paradox that Elrond could read the runes while Gandalf the Grey could not, a puzzle that Tolkien resolved with typical panache in the 1960 Hobbit.
_{The History of the Hobbit - The Second Phase - II (i) - "The Trolls"}

Rateliff speculates that had the 1960 Hobbit advanced past the second chapter we would have also seen similar rewritings of the scene where Elrond identifies them.

One other long-standing point is resolved in this revision: the vexing question of why Elrond could read the writing on the swords but Gandalf could not. Now we are told that the runes are obscured by old dried goblin-blood; not until they are cleaned can the letters be seen. Presumably their hosts perform this task for them during their stay, and the scene of Elrond’s viewing the swords in Chapter III would probably have been slightly recast to incorporate a presentation of their newly polished swords.
_{The History of the Hobbit - The Fifth Phase - "The End of the Fifth Phase"}