Gold exchange traded funds have rallied back near all-time highs as the European debt crisis takes a turn for the worse this week.

Gold futures were down fractionally Tuesday morning, hovering just below $1,550 an ounce after the European Union released updates on the region’s finances. The precious metal has benefited from investors’ desire for safe havens as EU officials for the first time discuss a default of at least part of Greece’s debt. [Euro ETFs Dive on Worries Greece May Default]

Eurozone officials from the 17 countries that share the currency promised to implement cheaper loans, longer maturities and flexible rescue plans “shortly” in an attempt to stave off the financial contagion, reports Ruju Shen for Reuters.

Italy’s default insurance recently hit a record high, which suggests that investors do not believe in the country’s ability to repay its loans, reports Tatyana Shumsky for The Australian.

“Italy was coasting along and seemingly making progress; now that its not, we’re seeing panic dumping of euros and panic buying of gold by some traders,” commented Rob Kurzatkowski, senior commodity analyst at optionsXpress, in the report. [Italy ETF Sells Off on Credit Fears]

“We’ll probably see a lot of support for gold from rising risk aversion due to concerns of escalating debt in Europe,” remarked Natalie Robertson, commodities analyst at ANZ. “Although the rising (U.S.) dollar could pare back some of the interest in gold.”

Showing Page 1 of 2