Gold exchange traded funds have been stuck in a narrow 5% range for over two months, but the Eurozone debt crisis and talk of further quantitative easing from the Federal Reserve are fueling a breakout to new record highs.

Gold futures hit an all-time high on Wednesday just under $1,580 an ounce as precious metals ETFs rose in premarket action.

Gold ETFs rallied Tuesday after Moody’s hacked Ireland’s debt rating down to “junk” status, while the Fed minutes revealed some officials would be open to “additional monetary policy accommodation” if the economy stumbles. [Gold ETFs Near Lifetime Highs After Fed Minutes, Ireland Downgrade]

“Although the gold price has performed well recently, gold futures speculative net long positions have remained low, indicating that the metal is not overbought,” ETF Securities said in a report this week.

Gold ETFs such as SPDR Gold Shares (NYSEArca: GLD), iShares Comex Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have been trapped in a channel for about 10 weeks, but they could be breaking out.

SPDR Gold Shares

Chart source:

Full disclosure: Tom Lydon’s clients own GLD.

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