Gold and silver are rising despite the spike in US bond yields and a stronger dollar.

The silver price rose 1.0% last week, bringing gains over the past 8 weeks to 27%. The gold price also rose, bringing the total increase to 14% since its 5 July low.

While the spike in US bond yields is pressuring many financial assets, precious metals took the latest release of the Fed’s FOMC minutes in stride, ignoring the Fed’s statement that it is “broadly comfortable” with moving ahead with reductions in bond buying in the near future. The fact that both gold and silver prices ended the week higher indicates that the start of Fed tapering has largely been priced in to precious metals prices. [Silver ETFs Getting Help from Speculators]

U.S. 10yr yields and the gold price are now trading more or less around the same levels they were in November of 2010, when QEII was first announced. The 2013 correction in precious metals prices has attracted substantial physical demand, notably strategic buying by China. This demand surge, combined with a sharp decline in recycled gold supply and diminishing mining productivity, appears to be forming a solid foundation for the gold price.