Gold and silver prices rose Monday in late afternoon reversal of direction sparked by a report that China was close to buying Italian government debt.

The Financial Times reported that top officials of China Investment Corp, one of the world's largest sovereign wealth funds, visited Italy last week to discuss buying the Mediterranean nation's bonds. Such a possibility comes as Italy's national debt rises to 120 percent of its gross national product and the cost of servicing that debt threatens to choke the domestic economy.

The British financial newspaper said the Chinese leaders held talks with Giulio Tremonti, finance minister, and Italy's Cassa Depositi e Prestiti, a state-controlled entity that has established an Italian Strategic Fund open to foreign investors.

Word of the possibility that China may, in effect, bailout Italy gave U.S. stocks a positive jolt just before closing and helped lift precious metals in electronic trading on the New York futures exchange.

The S&P climbed 0.70 percent to 1,162.27 and the Nasdaq composite rose 1.1 percent to 2,495.09. U.S. Treasuries fell as the news curbed safe-haven buying of American government debt.

Another safe-haven asset, the U.S. dollar, which had been positive all day, turned negative, and the euro pared earlier declines.

Gold rose in electronic trading by $6.10 to $1,819.40 and silver added by 17 cents to $40.39.