The precious metal was worth more than $1,910/oz on the spot market at the time of writing.

"The fact is we're seeing gold trending strongly higher in an environment where the Fed is laying the groundwork to talk about tapering," Pepperstone head of research Chris Weston said this morning.

Market futures were mixed following holidays in the US and UK yesterday.

Among developments in China, banks are being forced to hold more foreign currencies in reserve for the first time in more than a decade, to rein in the surging yuan, Bloomberg reported.

The country is also looking to ease the current two-child restriction, allowing three to boost the birth rate.

In Toronto, INV Metals (TSX: INV) jumped 55.1% to C76c on news of an acquisition by Dundee Precious Metals, at a 63% premium which implied a value of 80c per INV share.

For its part, Dundee (TSX: DPM) lost 2.27% to C$8.61.

Strike action continues at BHP operations in Chile, however larger copper producers closed lower in Toronto.

Both First Quantum Minerals (TSX: FM) and Lundin Mining (TSX: LUN) lost more than 1%.

Barrick Gold also closed lower, down 1.6%.