The gold price spiked towards $1,300 in Tuesday morning London trading after China reported its slowest rate of GDP growth in 24 years. Spot gold was last at $1,192.00/1,192.80 per ounce, up $17 on the previous session’s close and looking likely to test the key psychological level of $1,300 after reaching a high of $1,194.30 earlier in the session, its best since August 2014. Chinese GDP growth for 2014 at 7.4 percent fell short of Beijing’s 7.5-percent target – the slowest rate of growth since 1990. Fixed asset investment also fell to 15.7 percent from 15.8 percent previously. Chinese buying has since spiked, with many investors reportedly turning to safe-haven assets on top of the already heightened demand ahead of the Lunar New Year. “We would expect confirmation of reduced Chinese economic momentum to spur physical gold purchases, reinforcing a floor under the metal though bargain buying,� FastMarkets analyst Tom Moore said. “With Beijing also attempting to steer Chinese investors away from the stock market via recent regulation, we would expect to see the Chinese public return once again to their historic store of wealth,� he added. Growth in the world’s second-largest economy missed its target despite three separate instances last year of the country’s central bank stepping in to stimulate growth. Still, Chinese industrial production improved to 7.9 percent from 7.2 percent in the previous year and above analysts’ expectations at 7.4 percent. The International Monetary Fund has downwardly revised its 2015 growth projection or China to 6.8 percent from 7.1 percent and to 6.3 percent in 2016 from 6.8 percent. Gold is also higher ahead of Thursday’s ECB policy meeting, where a full-scale quantitative easing (QE) programme is expected to be announced. Gold in euro terms is trading at its highest since May 2013 at 1,116.70. “Interest in XAUEUR remains strong ahead of Thursday’s ECB policy meeting, with most banks thinking that an outline for QE will be presented by the central bank and more downward pressure will be heaped on the EUR. This should keep this cross supported above $1100 in the short to medium term and we still see upside potential to that trade,� MKS said in a note. Safe-haven buying also continues to underpin the higher price and has been strengthened on news that far-left and anti-austerity Greek party Syriza has increased its lead ahead of elections on Sunday, according to the latest polls. In other data today, German ZEW economic sentiment at 48.4 was better than the forecast 40.1, while the eurozone figure at 45.2 also bettered expectations of 37.6. Still to come from the US is a speech from FOMC member Jerome Powell and the NAHB housing market index. In other metals, silver followed gold higher and hit a four-month high at $18.10 earlier in the session; it has since retreated slightly to $17.90/17.95 per ounce, up 26 cents. Palladium was up $4 at $763/769 per ounce and platinum was performing well at $1,265/1,270, up $9. This morning it was confirmed that Glencore has suspended operations at its Xstrata Eland mine following the death of a worker at the weekend.

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