Gold exchange traded funds rose about 1% on Tuesday as European debt fears continued to rule the headlines and Spanish 10-year bond yields spiked to a euro-era high.

The precious metal climbed back above $1,600 an ounce with traders positioning for next week’s Federal Reserve meeting.

In Europe, Fitch cut its credit ratings on 18 Spanish banks. The country’s 10-year bond yields surged to more than 6.8%, the highest level since the introduction of the euro in 1999.

“We’re in uncharted territory,” said Nick Stamenkovic, market strategist at RIA Capital Markets, in a CNNMoney report.

Gold and other precious metals are sensitive to expectations of further easing from the Federal Reserve and European Central Bank. [Gold ETFs: Bullish Futures Positions Surge]

“With the U.S. Federal Reserve’s next policy-setting meeting set for June 19 and June 20, the next week or so may be the last chance for investors to buy gold at under $1,600 an ounce … that is if Fed Chairman Bernanke and his colleagues at the Fed vote to pursue another round of quantitative easing (QE3) or other stimulative monetary actions,” said Jeffrey Nichols, senior economic advisor at Rosland Capital, in a note. “We think this is likely, if not at next week’s Federal Open Market Committee meeting, then soon after.”