Updated from 12:22 p.m. ET with settlement prices

NEW YORK (TheStreet) -- Gold prices jumped on the first trading day of 2014 as investors viewed the metal as a cheap purchase after it dipped below a key price level to close out 2013.

Gold for February delivery at the COMEX division of the New York Mercantile Exchange climbed $22.90 to settle at $1,225.20 an ounce. The gold price traded as high as $1,230.80 and as low as $1,202.50 an ounce, while the spot price was unchanged at $1,223.79.

"I think more it's just bargain buying," Miguel Perez-Santalla, vice president of business operations at BullionVault, said in an interview. "[Traders] came in and saw it was cheap -- it started in Europe, they started buying and it rallied up today."

Gold prices fell more than 28% in 2013 as a record year in stocks, bank downgrades of the yellow metal and the Federal Reserve's pullback in economic stimulus rotated investors out of the asset.

The price fell below $1,200 an ounce on Tuesday -- but settled little changed -- as traders squared away books for the end-of-year and end-of-quarter accounting. That price level has been a key level of technical support -- the market repeatedly has tested breaking below $1,200, but has failed to stay below that price.

Silver prices for March delivery gained 76 cents to $20.13, while the U.S. dollar index was increasing 0.52% to $80.63.

Gold mining stocks were mostly higher on Thursday. Shares of Newmont Mining (NEM) were rising 4.2% to $23.99.

Gold ETF SPDR Gold Trust (GLD) was up 1.6% to $118, while iShares Gold Trust (IAU) was adding 1.5% to $11.86 a share.

-- Written by Joe Deaux in New York.

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