  We construct Gray codes over permutations for the rank-modulation scheme,
which are also capable of correcting errors under the infinity-metric. These
errors model limited-magnitude or spike errors, for which only
single-error-detecting Gray codes are currently known. Surprisingly, the
error-correcting codes we construct achieve a better asymptotic rate than that
of presently known constructions not having the Gray property, and exceed the
Gilbert-Varshamov bound. Additionally, we present efficient ranking and
unranking procedures, as well as a decoding procedure that runs in linear time.
Finally, we also apply our methods to solve an outstanding issue with
error-detecting rank-modulation Gray codes (snake-in-the-box codes) under a
different metric, the Kendall $\tau$-metric, in the group of permutations over
an even number of elements $S_{2n}$, where we provide asymptotically optimal
codes.
