Gold futures closed at their highest level since June 7, in a broad metals rally triggered by the tumbling dollar

The metal gained 4% in the second quarter.

Gold for August delivery ended the session up $27.10 at $616 an ounce on the New York Mercantile Exchange, an increase of 4.8% for the week. Gold hasn't closed above $600 since June 12.

Other metals prices also posted gains. July silver added 50 cents to $10.833 an ounce, July platinum rose $41 to $1,246.70 an ounce and September palladium was up $10.10 at $323.50 an ounce. July copper rose 3.9 cents to $3.4625 a pound.

Giving a boost to gold prices, the dollar fell further Friday after data supported the case for the Federal Reserve to end its two-year rate-increase campaign.

"We're at a peak of interest rates," said John Clemmow of Investec Securities. "Gold is extremely interest rate-sensitive and dollar-sensitive. The real level of interest rates is set to go softer and gold has more upside than downside in this case."

Yesterday, the Federal Reserve raised interest rates 0.25 percentage point to 5.25% in a statement that analysts interpreted as less hawkish on inflation than expected.

"The Fed has moved from acting to reacting on interest rates," said Julian Phillips, an analyst at GoldForecaster.com, adding that yesterday's statement from the Fed confirmed that growth is a bigger priority than inflation.

"As a result, the gold price appears to have found a tradewind in these summer doldrums," Phillips said.

After clearing its 100-day moving average of $603.60 today, gold is now underpinned at $600, while resistance above is pegged at $625 to $645, said James Moore of TheBullionDesk.com.

"Gold's advocates see signs of sufficient structural weakness in the dollar to feel encouraged to opt out of it and into a hard currency," said Jon Nadler, investment-products analyst at Kitco.com.

"While post-holiday trading may well see an easing in gold prices, there is little doubt that we have a new set of conditions to deal with in the markets, now that the interest rate as a factor has been neutralized," Nadler said.

Metals trading on the New York Mercantile Exchange closed early today and will remain closed on both Monday and Tuesday for the Independence Day holiday.

Economic indicators will drive gold to the $800-an-ounce range by year's end, according to Donald Doyle, chief executive of Blanchard & Co., the biggest retail dealer of rare coins and precious metals in the U.S.

"We continue to remain bullish on gold because of the Fed's recent actions," Doyle said in a statement yesterday. "They have acknowledged that the economy has slowed and additional rate hikes to curb over-hyped minor inflation appear unlikely."

In contrast, Steven Jon Kaplan, a senior editor at TrueContrarian.com, said that low physical buying and rising interest rates worldwide will plunge metals prices to new lows before year's end.

"Looking forward to the third quarter, after an initial attempt to move higher, there will be a sharp pullback in gold, silver, and copper," Kaplan said. "I expect that gold will make its low of the year in the third quarter, probably near $500 an ounce."

Physical buying of gold and silver typically lags in the third quarter because countries that are big physical buyers, such as India, have few holidays over the summer. As a result, gold tends to make a low in August, Kaplan said.

On the supply side, gold inventories fell by 32 troy ounces to 8.03 million troy ounces as of late Thursday, according to Nymex data. Silver supplies dropped by 19,562 troy ounces to 102.7 million and copper supplies were flat at 8,174 short tons.