Gold price up on Fed minutes, Ukraine worries and tanking stocks

The price of gold built on recent gains on Thursday reaching a two-week high after soothing words on US interest rates, stocks suffered major declines and worries the situation in Ukraine could deteriorate into chaos led to safe-haven buying.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery in late afternoon trade exchanged hands for $1,320.50 an ounce, up more than $14 from yesterday's close.

The metal touched a two-week high of $1,224 earlier in the day.

Russia on Thursday warned Ukraine that it could cut of its gas supplies over more than $2 billion of unpaid bills. Pipelines crossing Ukraine supply 15% of Europe's natural gas.

At the same time Nato warned that a Russian force of 40,000 troops on the Ukrainian border was "at high readiness".

Gold's status as a hedge against inflation was also burnished after minutes from the US Federal Reserve released overnight showed the bank would continue scaling back its stimulus measures at a steady pace, with an early rise in interest rates unlikely.

US stocks – particularly the tech sector – were slammed on Thursday with the Nasdaq Composite posting its worst session in more than two years. The blue-chip Dow Jones losts 267 points while the broader S&P 500 gave up just over 2%.

More investors believe a correction in frothy US stock markets are long overdue and are rotating back into gold thanks to its perceived status as a storer of wealth.

Marc Faber, editor and publisher of the Gloom, Boom & Doom Report, told CNBC a 1987-type of crash in the S&P of 30% is coming in the next 12 months.