Updated from 2:32 p.m. EST

Gold overcame earlier selling pressure and rallied to a higher close after energy prices turned around.

April-dated contracts for bullion added $2.30 to close at $654.50 an ounce on the Comex division of the Nymex. Open interest in the April contract has now grown to 11.2 million ounces, edging out the February-dated instruments as the benchmark.

Open interest in the February futures recently stood at 10.8 million ounces and will quickly taper off as traders roll their positions forward.

The bullion exchange-traded funds followed the futures prices higher, with the iShares Comex Gold Trust ( IAU - Get Report) and the streetTracks Gold Shares ( GLD - Get Report) each up fractionally.

For much of the session, prices traded down following Tuesday's spike of almost $12, but a late-day surge pushed the gold into positive territory.

Helping the charge was action in the energy markets. On the Nymex, oil prices, which were also weaker for most of the day, staged a minor recovery. Crude prices closed up 33 cents at $55.37 a barrel. Gold sometimes trades in tandem with crude, which is seen as a driver of inflation. Some investors buy gold as a hedge against a generally rising price level.

But longer term, the gold bulls have their hopes set on a weaker greenback.

"Fundamentally, the trigger for higher prices is that the dollar is starting to turn lower again in the medium-term," which should add to the bullish case for bullion, says Joe Foster, gold strategist at money management firm Van Eck in New York.

The currency story was slightly muddied Wednesday though, as the dollar firmed against the euro. One euro would recently buy $1.2956, down from $1.303 late Tuesday. Dollars were changing hands for 120.98 yen vs. 121.64 yen previously. Bullion prices tend to move in the opposite direction to those of the U.S. currency.

Turning to the technical analysis side of things, at least one chart watcher says gold is setting up for a big push ahead. Because gold settled above $653.50, it now has a chance to get all the way to $720 by the end of the second quarter, says Tony Raia, an analyst at Chicago's Linn Group.

In other parts of the precious metals complex, another market watcher sees good news for the platinum group metals.

" President Bush's pledge to increase spending on alternative fuel sources may speed up accessibility of fuel-cell technology, potentially boosting demand for platinum," notes James Moore, an analyst at TheBullionDesk.com.

Spot platinum prices were recently trading at $1,166 an ounce in London, down $2 from Tuesday, but up from an average of $1,029 last January.

Shares of platinum producers North American Palladium ( PAL) and Stillwater Mining ( SWC) were up 0.7% and 0.3%, respectively.

Elsewhere in the precious metals patch, RBC Capital Markets trimmed back its stock price target on Barrick Gold ( ABX) to $36 a share from $43. The shares rose 1.1% to $29.67.

As for base metals, Comex copper contracts closed up 2 cents at $2.60 a pound.

There may be a larger bounce in the making for copper, RealMoney.com contributor Helene Meisler thinks.

"It looks to be making a little bottom," says Meisler, who sees technical support just under the $2.50 level. "It is very early and will probably have fits and starts."

As for the ferrous metals, Longbow upped its rating on AK Steel ( AKS - Get Report) to neutral from sell, helping boost the stock 4.4%.