The gold price moved lower on Wednesday before breaking out of its recent trading range of $1,360 – $1,370 an ounce despite the US Fed's minutes revealing very little about changes to monetary policy.
By mid-afternoon Wednesday, an ounce of gold for December delivery was changing hands for $1,379, the highest for the day and levels last seen mid-June on Comex in New York.
In after hours trade the metal had turned lower again, settling at $1,370, evidence of investors' uncertainty about the impact of the Fed statement.
Precious metals investors had been worried that the July minutes of the US central bank meeting would indicate that the Fed will start tapering off its quantitative easing program as soon as next month.
The Fed has been reviewing QE and is eager to throttle back asset purchases of $85 billion a month at the first signs of a solid economic recovery in the US, but Wednesday brought no certainty about timing.
There does seem to be broad consensus among members that it will happen this year although "a few members emphasised the importance of being patient and evaluating additional information on the economy before deciding on any changes to the pace of asset purchases," according to the minutes.
The Fed will meet on September 17 and 18 and again in October and December.
The Fed is on target to have poured more than $4 trillion into the US economy as part of the QE program by the end of the year.
The first QE program was announced by Bernanke in December 2008 when an ounce of gold cost $837 an ounce.
QE, which floods markets with cheap money and keeps interest rates near zero or negative in real terms, burnishes gold's status as a storer of wealth.