Gold futures extended their prior-day gains Friday, in a continued recovery from recent losses sparked by inflation and interest-rate fears

Gold for August delivery closed up $11.40 at $581.70 on the New York Mercantile Exchange, but was down 5.1% for the week.

"A highly oversold market will always see some half-hearted buying, but any retracement at this juncture is a 'dead cat bounce,'" said Dale F. Doelling, chief market technician at Trends In Commodities.

Battered by fears of rising inflation and interest rates, gold has pulled back sharply from its 26-year high above $730 an ounce hit in May. On Thursday, the metal ended higher for the first time in eight sessions, joining in a broader market recovery.

"If the view toward the equity market (and therefore the economy) remains upbeat, we would not be surprised to see gold claw its way back to the critical psychological level of $600," said analysts at NSFutures.com.

The inflation theme resurfaced in a speech by Federal Reserve Chairman Ben Bernanke late Thursday. The chief reiterated his stance that high energy and commodity prices are likely contributing to rising inflation readings. But crucially, the rate of pass-through to core consumer-price inflation "appears to have remained low in the current episode," Bernanke said in a speech in Chicago.

"The markets are still absorbing the idea that the Fed will hike rates," said David Meger, managing director at Alaron Metals Services. "As you have the Fed fighting inflation, the perception is that's detrimental toward gold."

Jon Nadler, investment products analyst at bullion dealers Kitco.com, agreed: "Gold continues to pin its immediate hopes on the observed emergence of physical demand by bargain hunters, on a firmer equities market, and on every word that Ben Bernanke may or may not utter before late June."

Early Friday, William Poole, head of the St. Louis Fed, took another view, saying that high energy prices may be exacerbating inflationary pressures even though they don't appear in current price data.

"We may – and I emphasize 'may' because my purpose is to make a general point and not to conduct a full analysis of the current situation – face more inflation pressure than currently shows up in formal data," Poole said at a banking conference in South Korea.

The other precious metals followed gold's lead and also posted gains except for platinum, which finished down $16.3 at $1,144.6 an ounce. Silver ended up 16 cents at $10.130 an ounce. Palladium added 25 cents to $306.05 an ounce. Copper was up 7.7 cents at $3.2915 a pound.

On the supply side, gold inventories were unchanged at 8.03 million troy ounces as of late Thursday, according to Nymex data. Silver supplies were down 1.8 million troy ounces at 105.8 million troy ounces.