Core Strategic Partners says the price of gold has had a strong start to 2016 with an ounce of the yellow metal fetching north of $1200 for the first time in 8.5 months. Its fortunes are in stark contrast to those of equities which have spent the year so far on the back foot with several global bourses firmly in bear market territory.

Gold spent most of last year and the preceding two being sold solidly after the inflation many investors were expecting failed to materialize and as the Federal Reserve prepared the world for the first increase in the Fed Funds rate for nine years.

“We’d venture than a lot of gold bears have been surprised by the rally in prices,” said Piyush Patel, senior commodities researcher at Core Strategic Partners. “The price action we’ve seen in gold since the Fed’s December rate hike has been redolent of a classic ‘buy the rumor, sell the news’ reaction to a key event. Obviously, given the extent of the run this year, there are obviously other factors at work here,” he added.

Patel said that mounting concerns over the slowdown in the US economy and, consequently, the likelihood that the Federal Reserve would delay increasing rates again in 2016 had made gold look attractive again to investors.

Core Strategic Partners says gold and silver bullion holdings represent a 12% weighting in its portfolio but it says it sees enormous upside potential in gold/silver miners and has raised its rating on several large cap miners including Yamana Gold and Silver Wheaton.

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