Fed QE minutes spark brief gold price surge

The gold price mini-rally continued Wednesday after the minutes from US Federal Reserve policy makers showed "many" members believed asset purchases should extend into 2014.

After hovering around the $1,250 level for most of the day, the gold price shot up to $1,265, before paring the gains as investors of the yellow metal tried to make sense of the Fed's outlook.

About half of the Federal Reserve's 19 member Open Market Committee said they would support halting the $85 billion per month bond-buying program towards the end of this year.

Others wanted the quantitative easing program, which will balloon the central bank's balance sheet to $4 trillion by the end of the year at the current rate, stopped immediately.

By early afternoon the precious metal gave up a chunk of the gains however, changing hands at $1,247 an ounce, as it recovers from three year lows below $1,200 an ounce

When the Fed starts tapering off QE, which floods markets with cheap money, it will further strengthen the US dollar and tarnish gold's status as a storer of wealth.

By 2:45pm EST time gold was trading back in range at $1,253, still up $8 on the day and more than $30 for the better since reaching near 3-year lows in Friday trade.