NEW YORK (TheStreet ) -- Gold prices were popping Tuesday as investors turned to gold as safe-haven asset after a slew of disappointing economic data.

Gold for December delivery was adding $14 to $1,261.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded as high as $1,261.90 and as low as $1,246. The U.S. dollar index was adding 0.03% to $81.90 while the euro was losing 0.19% to $1.28 vs. the dollar. The spot gold price was rising $14.30, according to Kitco's gold index.

Gold prices got a lift Tuesday on inflation worries out of the U.K. and a weaker-than-expected eurozone industrial production report.

Inflation fears jump-started the gold market in early trading after the U.K. consumer price index rose 3.1% in August from a year earlier. Economists were expecting a rise of 2.9%, but higher food, clothing and air travel moved the index higher. Gold is the go-to commodity when investors panic over inflation as gold is a form of money that retains some value. Unlike paper currencies, gold's value can never go to zero.

Gold prices were also being helped by a weaker industrial production reading out of the EU. Activity for July rose 7.1% year over year vs. the 8% expected. Despite sovereign debt fears, the EU, led by the stronger nations like Germany and France, has been able to keep growing but today's data signaled a possible reversal or a slowdown.

U.S retail sales for August rose 0.4% vs. the 0.3% expected but didn't seem to dampen gold's rally. Investors, trying to protect themselves against more negative news, were buying gold as a safe-haven asset. Despite the rally, some analysts were still wary.

"I'm thinking maybe we back off to the $1,230's," says Phil Streible, senior market strategist at Lind-Waldock. "But historically September is a great month for the gold market so that weakness I would definitely look at as an opportunity to the upside."

Silver prices were up 14 cents to $20.31 while copper was down 3 cents to $3.44 on the weak industrial production data.

Gold mining stocks, a risky but profitable way to buy gold, closed lower Monday. Barrick Gold(ABX) was down 1.14% to $44.21 while Newmont Mining(NEM) slipped 0.43% to $60.42. Other large gold stocks Randgold Resources(GOLD) and Goldcorp(GG) closed at $94.18 and $41.44, respectively.

--Written by Alix Steel in New York.

>To follow the writer on Twitter, go to http://twitter.com/adsteel.

Source: http://www.thestreet.com/story/10860015/1/gold-prices-surge-higher-top-1260.html?cm_ven=GOOGLEN