Investing.com - Gold prices rose above $1,500 an ounce again on Tuesday as talks on avoiding a disorderly Brexit came perilously close to breaking down, while more gloomy data from the U.S. bolstered the likelihood of another interest rate cut at the end of the month from the Federal Reserve.
By 10:30 AM ET (14:30 GMT), gold futures for delivery on the Comex exchange were at $1,510.75 a troy ounce, up 0.4% from late Monday, although still squarely in the middle of the range they’ve occupied since the beginning of September.
The odds of a U.S. rate cut when the Federal Open Markets Committee meets on Oct. 29-30 appeared to increase earlier after producer prices fell by the most in eight months, leaving the annual rate of factory gate inflation at 1.4%, its lowest since 2016.
North American investors have been a late but important addition to gold’s rally this year, adding 62.1 tons to their holdings of the metal through exchange-traded funds in September. By contrast, European investors, who had bought earlier against a backdrop of Brexit concerns and the European Central Bank’s negative interest rates, added only 7.7 tons.
Global gold-backed ETFs and similar products had $3.9 billion of net inflows across all regions last month, increasing their collective holdings by 75.2 tons to 2,808 tons, the highest ever. Overall, global gold-backed ETF holdings have risen by by 13.4% to date, according to the WGC.
The previous high dated back to late 2012, at which time the gold price was near$1,700 per ounce, 18% higher than currently.
According to the WGC, Europe now accounts for 44% of all ETF holdings and it was Europe again that initially drove gold higher Tuesday after U.K. government sources briefed local media that a no-deal Brexit had become more likely.
U.K. Prime Minister Boris Johnson failed to persuade German Chancellor Angela Merkel in an early telephone call that his proposals for avoiding border checks in Ireland could be squared with the EU’s desire for control over the borders of its customs union and single market.
Elsewhere in haven assets, silver futures rose 1.4% to $17.78 an ounce, their highest in nearly two weeks, while platinum futures rose 0.5% to $892.30 an ounce.
Copper futures, which generally move in the opposite direction to havens, fell 0.3% to $2.57 a pound.