It is the first time the precious metal has risen above the $1,660 an ounce mark since early May, as investors waited for clarity on Fed policy.

The minutes of the latest meeting of the Federal Open Market Committee showed members were behind imminent further action, the Financial Times reports.  

“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the the minutes.

It also discussed a range of tools it could use to ease monetary policy further, including a third round of quantitative easing when it would buy more long-term assets.

According to the minutes: “Many participants expected that such a programme could provide additional support for the economic recovery both by putting downward pressure on longer-term interest rates and by contributing to easier financial conditions more broadly.”

The committee considered extending its forecast of low interest rates beyond the current date of “late 2014”. It said this could be particularly effective if it also stated rates will remain low even as the recovery progresses, according to the FT.

A couple of members raised the idea of cutting the interest the Fed pays to banks on their excess reserves or starting a programme to encourage banks to lend to households and businesses.

US equity markets rose in late afternoon on the news, with the S&P 500 recovering from a loss of 0.4% to close slightly higher.

Meanwhile, the dollar hit a two-month low against a basket of currencies while US treasury yields extended their decline. The yield on 10-year notes had dropped 11bps to 1.7% late in New York, the Financial Times reports. 

In last week’s Investment Week, we reported on managers following hedge fund investors to up their gold holdings ahead of a potential QE-driven rally. To read the story click here.