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) were climbing 5.8%, and shares of Eldorado Gold ( EGO) were jumping 5.5%.

Among volume leaders, Barrick Gold ( ABX) was increasing 4.7%.

Gold ETF SPDR Gold Trust ( GLD) was up 2.2%, while iShares Gold Trust ( IAU) was tacking on 2.3%.

-- Written by Joe Deaux in New York.

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