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Gold is holding strong amid market volatility

As markets realized that Israel’s retaliatory strike on Iran did little damage, gold lost early momentum but still managed to hold on to small gains that saw it close above $2,400 an ounce on Friday.

Comex Gold for June delivery last rose $8.70 to $2,406.70 an ounce. That was after hitting an intraday high of $2,433.30 per ounce and breaking a range of over $48 from the low of $2,386 per ounce.

Despite the swings, gold still managed a 2% gain this week, pushing the price up 16% year to date.

The price of the Australian dollar ended at just over $3,727. This, as we have already seen in some quarterly reports from local miners, will provide a major boost to profits and cash flows in the second half of the year. Look for Northern Star Resources’ report to support this mid-week, while Newmont announces its first quarter earnings call on Thursday with Newcrest tucked away.

Gold rose above the $2,400 mark in Asian trading on news of Israeli retaliation, but that faded as Europe opened up and then the US, as it became clear the attack was more symbolic than strategic or tactical.

And as Iran downplayed the need for retaliation, traders turned their attention back to bond yields, the value of the dollar and the pace of Fed rate cuts.

“Gold briefly broke $2,400 on Israeli attack reports before paring gains. Still on track for a fifth weekly gain despite strong US data, hawkish comments from Fed members and a stronger dollar,” Saxo Bank noted.

The ICE dollar index last edged lower (with the Aussie ending at around 64.20 US cents, down 0.9% for the week), while the US 10-year bond yield ended at 4.62%, up of just over 9 points for the week.

Copper prices had another good week as fundamentals continue to drive interest (a shortage of concentrates for the Chinese industry to process keeps prices higher than they should be).

The Comex metal for the month of May ended at $4.49 per pound, close to a two-year high and up 4.1% for the week and more than 15% for the year to date.

Silver also held steady, finishing at $28.74 an ounce – up 1.3% for the week and almost 20% for the year to date.