Gold continues to hover

For a fourth day in a row gold is bubbling just under the $1300 level, not quite able to break through.

Last night’s better-than-anticipated Chinese GDP figures have certainly seen equity markets rally, however the precious metal market is yet to show quite as much enthusiasm. Arguably, more significant to gold sales is the impressive jump in the annual Chinese retail sales figures, which have come in at 13.3% ahead of the expected 12.9%. This shows that the underlying consumer market in the Asian powerhouse is still thriving.

The inability of the gold price to stretch its legs and head higher is disappointing, however the longer it treads water and moves sideways the more it continues to edge towards previous resistance levels. This trading behavior does point towards a more aggressive move when the precious metal ends its current levitation act.

There have been a few underlying signals that point towards a slightly more optimistic mindset for gold. The cost of borrowing physical gold has now risen to a 54-month high, and with the spot price at such low levels a number of the larger mining companies must be considering the viability of continuing with some of their operations, as profits have been so directly eaten into.

Spot gold chart

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