Silver becomes the best performing precious metal

Silver turned out to be the best performing precious metal last week rising 4.7%, leveraging its high correlation to gold. Gold and Silver are likely to remain on tenterhooks until the next US unemployment number but should continue performing a foundation as the need to raise the US debt ceiling or face government shut-down, becomes the primary market focus.

Geopolitical issues often boost gold for short duration periods, while sovereign debt issues normallyhave a longer lasting impact, according to a weekly review by ETF Securities Ltd.

Gold and silver surge as the Fed reminds the market US economic conditions remain subpar
The unexpected reluctance by the FOMC to reduce its bond buying program at last week’s meeting buoyed precious metals and put pressured the US dollar. As financial markets enter a typically volatile time of the year, the Fed properly noted that recent US unemployment figures have been disappointing, with Chairman Bernanke specifically mentioning the decline in the labor participation rate to a 35-year low in the post meeting press conference.

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