General dollar weakness and fear over the outlook for the global economy and the anticipated reaction from central banks has pushed the price of gold and silver to their highest levels in 15 months.

In already thin holiday trading, gold for immediate delivery pushed through psychological technical resistance at $1300.00/oz while silver continued its recent winning streak with spot prices knocking on the door of $18.00/oz.

With market confidence in the ability of the US Federal Reserve to make good on its plan to raise interest rates twice in 2016 waning and jitters over the state of European banks, the price of gold has soared this year by more than 18% while silver is up more than 20% from where it started the year.

“At the end of 2015, it was impossible to get more bearish on gold,” said Manfred Koss, commodities strategist at Tokyo-based investment house, Shinsei Corporate Management.

“Back then, we’d seen gold fall for 4 years straight plumbing depths as low as $1080.00 but, since the December rate hike, it’s taken off. We put that largely down to the huge selloff in global equities in January. The Fed seems impotent in the face of economic data that leaves us in no doubt the economy is slowing down. We think they’ll be loosening policy soon, not tightening and gold bulls seem to concur.”

For investors seeking to gain exposure to what appears to be a resumption of the secular bull market in precious metals, however, Koss sounds a note of caution. “This run up has been exciting but these rallies never go up in straight line. Shinsei Corporate Management expects pullbacks in the short term, especially when economic data appearing to support assertions the US economy is performing better emerge,” concluded Koss.

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