Gold prices managed to eke out a slight gain Friday to move back above the $1,560 a troy ounce mark – but the precious metal has had a less-than-stellar run this week, on track for a 1.9% loss.

In London trading Friday, the spot gold price was up 0.4% at $1,563.71, bouncing from as low as $1,533.41 earlier this week.

The upward move in gold came as the euro rebounded some from two-year lows against the dollar. The euro inched up from early lows against the dollar Friday, although sentiment around the troubled currency remains guarded.

Gold’s rise Friday also was attributed to bargain hunting, calmer markets and short covering ahead of the three-day holiday weekend.

This week continues gold’s eleven-week downward trend as the state of Greece and the entire Eurozone region has kept world markets on edge and investors jittery.

Worries over Greece exiting the Eurozone prompted heavy selling in the currency this week as the ailing Mediterranean country, operating without a government, faces imminent default.

“Gold’s direction seems to be driven more by the level of market risk aversion and the euro currently,” BNP Paribas analyst Anne-Laure Tremblay told Reuters. “Market sentiment on gold is fragile at the moment. There have been tentative rebounds, but so far bullish momentum has yet to materialize.”

As always, however, there’s another side to this story.

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Greece is frozen in a political stalemate. Youth unemployment is running at over 50%. And there has been a $1 billion run on Greek banks.

From near and afar, there appears to be no easy way out, especially now that the Eurozone is heading back into a recession.

It’s times like these when investors pour into the U.S. dollar for its “perceived safety.”

With commodities priced in U.S. dollars, this spike in the greenback has sent commodities-including gold prices-into a tailspin since early March.

That has many doubters asking: “Has the commodities super-cycle ended?”

It’s a reasonable question considering the Continuous Commodity Index (CCI) is back down to levels it last saw in September 2010.

What’s more, gold prices have backed off to near $1,500/oz., and oil prices have fallen from $110 to $90/barrel.

But as you’ll see, the commodities coin does have another side.

The Other Side of the Commodities Story

In fact, a recent article by Frank Holmes, CEO and chief investment officer at U.S. Global Investors, pointed out how China and other emerging nations are in better fiscal shape than much of the West.

Even if China is slowing somewhat, it is still growing at an enviable 8% per year, with only 42% debt to GDP ratio. So rather than go for more outright stimulus, it’s expected that China will target new loan growth and its M2-money supply growth to around 14%.

Meanwhile, India and Australia have just lowered interest rates while other central banks are basically refusing to raise rates.

It means the world will keep turning, people will keep consuming and annual demand of raw materials is likely to remain elevated.

As for gold prices, let’s cut right to the chase.

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