Updated from 2:07 p.m. EDT

Gold fought back and closed higher Thursday following the latest report on U.S. economic growth, an increase in crude oil prices and a weaker dollar.

The June gold contract gained $11, or 1.7%, to $648.50 an ounce. The advance comes a day after the contract plunged $36.20, or 5.4%. That sharp drop during the previous session convinced many traders that the broad selloff that has hit commodities over the past two weeks is still under way.

After surging to a 26-year high of $730 earlier this month, gold had dropped nearly 13% to an intraday low of $636.80 on Monday. But then metals rallied Tuesday, fueling hopes that the commodities correction was through.

Chintan Karnani, a metals analyst at New Delhi's Insignia Consultants, believes retail investors and traders aren't buying into precious metals because "they are nervous and are using every rise in gold and silver as an opportunity to exit."

However, Peter Grandich, a gold analyst and editor of the

Grandich Letter

, says one of his sentiment indicators has just turned positive for gold after reaching its most bearish level ever two weeks ago. Grandich had

issued a special alert the day before the steep decline started in gold and commodities.

He now says the worst of the correction is likely "behind us," especially for mining shares. Grandich wrote in his newsletter that his sentiment indicator "is likely going to have to go to very bullish before we get 'the' bottom, but it suggests the correction is all but near its end,

perhaps hours, days or a few weeks away at most."

Gold, which acts as a hedge against inflation, received a lift as oil again crossed above $70 a barrel. Crude for July delivery climbed $1.46 to $71.32 a barrel.

Among other metals, silver for July delivery gained 8.50 cents, or 0.7%, to $12.60 an ounce, and copper for July delivery rose 6.85 cents, or 1.9%, to $3.70 a pound. Both silver and copper had been weaker before reversing ground.

Earlier, a government report said the U.S. economy grew at a 5.3% rate in the first quarter, higher than the previous estimate of 4.8% but short of economists' forecasts for 5.8% growth. The inflation measure rose 2.2%, in line with expectations.

The report did little to change the view that the

Federal Reserve

will raise interest rates at its June meeting. The market was pricing in 56% odds of another hike next month, the same as Wednesday, according to Miller Tabak.

Fears that global central banks are lifting interest rates to curb growth and inflation pressure helped trigger the steep declines seen in commodities over the past two weeks. Expectations of more Fed rate hikes also have supported the dollar lately. A stronger greenback hurts the price of dollar-denominated commodities, such as gold, because it takes less of the currency to buy the same amount of gold.

With the dollar index, which tracks the greenback against a basket of key currencies, lower on Thursday, metals benefited. The dollar fell mostly against the yen as signs of a pickup in Japanese consumption revived expectations that the Bank of Japan might tighten.

Shares of metals miners were bouncing back, as well. The Philadelphia Gold and Silver index was recently up 4.5%, the Amex Gold Bugs index was up 5%, and the CBOE Gold index was adding 4.8%.

Among the biggest gainers,

Gold Fields

(GFI) - Get Report

was up 6.5%, and

Meridian Gold

( MDG) gained 5.4%.

Glamis Gold

(GLG) - Get Report

was recently up 6% after JPMorgan upgraded the stock to overweight from neutral.

The newly launched

Market Vectors-Gold Miners

(GDX) - Get Report

exchange-traded fund, which tracks the performance of the

Amex Gold Miners Index

, was up 4.5%. Elsewhere, the

iShares Silver Trust

(SLV) - Get Report

was up 1%, and the

StreetTRACKS Gold Trust

ETF

(GLD) - Get Report

was gaining 0.8%.