Gold Prices Surge on China Stimulus Reports (Update 1)

Updated from 10:41 a.m. EDT with settlement prices

NEW YORK ( TheStreet) -- Gold prices popped Thursday on reports that China may implement further easing to foster more economic growth in the country.

Gold for December delivery jumped $26.90 to settle at $1,780.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,782.90 and as low as $1,753.20 an ounce, while the spot price was up $26.40, according to Kitco's gold index.

"I think it's a combination of further easing by ... China, and an overall perception that gold had sold off significantly over the last few days and it's a good entry point, because the concerns of higher inflation down the road are certainly still very valid," said Oliver Pursche, co-portfolio manager at GMG Defensive Beta Fund.

Speculation of China stimulus grew from a Shanghai Securities News report that said the China Securities Regulatory Commission would announce 10 market-boosting measures at a media briefing on Thursday. Sluggish growth and weak economic reports in September have suggested more troubles ahead for China.

Silver prices for December delivery rose 73 cents to $34.67 an ounce, while the U.S. dollar index was falling 0.35% to $79.54.

The action in the eurozone was also a factor in Thursday's trading. Spain presented its 2013 budget, proposing sharp spending cuts. Also, Greek coalition partners earlier agreed on most of the budget cuts the country needed to receive more aid.

On the domestic front, news that U.S. real GDP growth was revised downward to 1.3% and durable goods orders fell precipitously in August was set against stronger than anticipated data on weekly initial jobless claims.

As easing efforts continue on weak economic forecasts, gold investors are watching for spikes higher in the yellow metal. Multiple banks have set high price targets, including Deutsche Bank at $2,000 an ounce in the first half of 2013, Citi at $2,500 an ounce in less than six months, and Bank of America at $3,000 an ounce by 2014.

Yoni Jacobs, chief investment strategist at Chart Prophet, noted gold is getting into rarefied territory again.

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