Gold surged 3 percent to above $1,600 an ounce to end the month of June with its first monthly gain in five months. This was after the investment appeal of the bullion was lifted by a European deal to shore up banks and cut borrowing costs.

After EU leaders agreed to allow their rescue fund inject aid directly into stricken banks from next year and intervene on bond markets for supporting troubled member states, silver and platinum group metals also soared.

Monetary stimulus by central banks and governments is bullish for the yellow metal, gold, which has been a hit among hedge fund managers and institutional investors for hedging against the loss of purchasing power due to currency depreciation and inflation.

"The gold rally is likely to continue because once again we held well above the $1,525 key support level, we've had rapid short-covering and now we have some physical demand. I don't think the market will press prices significantly at least in the near term," said James Steel, chief commodity analyst at HSBC.

Spot gold was up 3.2 percent at $1,599.66 an ounce by 3:15 p.m. EDT (1915 GMT); spot silver rose 4.6 percent to $27.54 an ounce while U.S. gold futures for August delivery settled up $53.80 an ounce at $1,604.20. Spot platinum was up 4.2 percent at $1,441.75 an ounce, while spot palladium rose 3.7 percent to $581.75 an ounce.