Gold futures closed higher Wednesday, strengthened by the falling dollar after Federal Reserve Chairman Ben Bernanke signaled that the end of the rate-hiking cycle may be closer than many expected

Gold for August delivery ended up $13.30 at $642.80 an ounce on the New York Mercantile Exchange, pulling back up from an overnight low of $618.90.

"Gold bullion and equities took off at drag-race speeds, immediately after Mr. Bernanke confirmed that he sees plenty of signs of a slowing U.S. economy," said Jon Nadler, analyst at Kitco.com. "Once again, gold can refocus on the geopolitical drivers that have lent it support in past weeks."

Other metals prices also posted gains. September silver added 60 cents at $11.125 an ounce. September copper edged up 1.9 cents at $3.5935 a pound, October platinum rose $2.90 at $1,237.50 an ounce and September palladium added $3.85 at $318.05 an ounce.

The dollar fell against major currencies after Bernanke told Congress that the economy is likely to slow, easing inflation pressures. His comments came just ninety minutes after a consumer inflation report that showed core prices rising at a faster-than-expected pace.

"The dollar had a very big reversal today," said Charles Nedoss, senior account manager at Peak Trading Group in Chicago. "The market followed some of Bernanke's statements. Gold was trading dollar weakness today."

Trading in metals has been very volatile lately with big price swings in both directions. Prices lost almost $40 in the last two sessions after gaining more than 5% last week as safe-haven demand was fueled by fighting in the Middle East, deadly train bombings in India and defiance by Iran and North Korea over their nuclear programs.

Gold has also been hurt by a shift into the dollar as a safe-haven play. The dollar had found strength in recent weeks from expectations that the Fed will keep raising rates, increasing the attractiveness of the currency and assets denominated in it.

Gold may now regain some of its safe-haven allure. Overnight, fighting between Israel and Lebanon continued. Since the conflict broke out last week, at least 270 Lebanese citizens and 25 Israelis have died, according to the BBC. An Israeli general said Tuesday that Israel's offensive would continue for another few weeks, and that the deployment of large numbers of ground forces had not been ruled out.

Dale Doelling, chief market technician at Trends In Commodities, said that gold will likely rise further in the next few days.

"The longer-term outlook isn't as clearly defined and it will take consecutive closes above the recent high at $677.50 to get the momentum players back into the market," Doelling said.

On the supply side, gold inventories were unchanged at 8.06 million troy ounces, according to Nymex data. Silver supplies rose by 996 troy ounces to 102.7 million and copper supplies fell by 42 short tons to 7,144 short tons.