NEW YORK (

TheStreet

) --

Gold prices

were popping on Monday morning as the U.S. dollar slipped and China signaled a shift in lending practices.

Gold for August delivery at the COMEX division of the New York Mercantile Exchange was surging $28.40 to $1,321.30 an ounce. The

gold price

traded as high as $1,325 and as low as $1,297.40 an ounce, while the spot price was adding $9.42.

The People's Bank of China removed control of interest rates on loans offered by the nation's financial institutions.

"Seems like anybody can go out and get smaller denominated loans, and what that's going to do is that's going to start pumping some money back into the

Chinese system," Phil Streible, senior commodities analyst at RJO Futures,

said in an interview

. Streible said this action is slightly inflationary, which is why gold continues to move up.

Silver prices

for September delivery were gaining 81 cents to $20.27 an ounce, while the

U.S. dollar index

was dropping 0.39% to $82.31.

Gold mining stocks were strengthening on Monday. Shares of

NovaGold Resources

(NG) - Get Report

were climbing 5.8%, and shares of

Eldorado Gold

(EGO) - Get Report

were jumping 5.5%.

Among volume leaders,

Barrick Gold

(ABX)

was increasing 4.7%.

Gold ETF

SPDR Gold Trust

(GLD) - Get Report

was up 2.2%, while

iShares Gold Trust

(IAU) - Get Report

was tacking on 2.3%.

-- Written by Joe Deaux in New York.

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