The stock market closed the week with modest gains, with the Dow Jones Industrials (DJINDICES:^DJI) recovering from early losses to post a small gain and bring its total rise for the week to 15 points, or about 0.1%. Yet, in a reversal of trends over the past several months, gold and other precious metals rose much more substantially for the week, with the SPDR Gold (NYSEMKT:GLD) ETF finishing with gains of almost 3%, and iShares Silver (NYSEMKT:SLV) posting a better than 2% advance. Let's take a look at what influenced the gold market this week to get a sense of whether precious metals can keep climbing and outpace the soaring Dow.

Glittering brightly
Most of the gains in precious metals came on Monday, with gold prices rising almost $40 per ounce, posting its best day in more than a year. Many gold watchers pointed to its climbing above $1,300 as a positive sign for the yellow metal, at least in the short run. Silver jumped even more strongly, gaining more than $1 per ounce at one point, to finish above the $20 level.

One interesting thing about the rise is that it came the week after testimony from Federal Reserve Chairman Ben Bernanke that touched on the value of gold. Bernanke told Congress that gold is "an asset that people hold as a sort of disaster insurance," and suggested that its plunge over the past several months could reflect investors feeling more certain about the economy and the future course of interest rates.

Earnings reports from gold-mining stocks didn't seem to support bullion prices, with major companies reporting disappointing results. Goldcorp (NYSE:GG) had to report a nearly $2-billion impairment charge to mark down its Penasquito mine's value as an exploratory asset, and chose to defer capital spending in order to cut costs. Even without the charge, Goldcorp's earnings failed to meet expectations. Newmont Mining (NYSE:NEM) took an eerily similar $1.8-billion charge against its Boddington and Tanami mines in Australia, again citing falling gold and copper prices, but posting a $0.10 per-share loss excluding one-time items, far below the $0.42 per-share profit that analysts had expected. Newmont also cut its dividend for the second quarter in a row, with a new quarterly payout of $0.25 per share marking a 29% reduction from its previous quarter's dividend.

Still, one explanation might simply be that, just as advancing markets lead bullish investors to take profits after big gains, the plunge in gold prices may simply have prompted those betting against the metal to take their profits, leading to a brief price increase. Given the speed with which popular media have written off the long bull market in gold as being over, smart investors might be taking that as a contrarian justification to buy.

Watch for follow-through
After a months-long drop in bullion prices, one week of outperformance isn't nearly enough to declare an end to gold's declines. Still, in a market that's been long starved of positive news, this week's modest advances could be just the beginning of a more powerful move upward, as long as the Fed doesn't step in and make a big policy change once more.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.