The 16-year-old singer was spotted rocking out at one of Taylor's concerts in her native New Zealand recently, despite saying the star wasn't a good role model.
The 'Royals' hitmaker - whose debut single went straight to number one - caused offence after she called Taylor ''flawless, and so unattainable''.
She told New Zealand's Metro magazine: ''I don't think it's breeding anything good in young girls''.
The outspoken star later retracted the comments, saying they were taken out of context and Taylor's was the first name that had popped into her head.
It was rumoured the two had buried the hatchet earlier this month after a Twitter photograph, apparently showing the two chatting outside a café in New York, went viral.
Fans said they saw 23-year-old Taylor briefly jump off stage to embrace the teen singing sensation before returning to perform and also posted mobile phone photographs of the moment on Twitter.
The '22' singer also allegedly gave Lorde's younger brother a kiss on the cheek.
Lorde has hit out at a number of artists since becoming a star in both the UK and the States, including Selena Gomez, and branded some of America's biggest pop stars as branded some of America's biggest pop stars as 'f***ing mental'.