Gold prices rose again on Monday on lower U.S. bond yields and a weaker dollar. The bullion has gained 8% so far and was on course for its highest monthly jump in ten months. The U.S. 10-year benchmark Treasury yield dropped by 1.593% and lowered the opportunity cost of owning the non-interest-bearing metal. The dollar index fell 0.1% against its rivals and made the yellow metal less expensive for investors using other currencies (GLD, UDN).

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Also, the rising prices in the U.S. and the UK boosted the demand for gold since it is considered a hedge against inflation.

Spot gold is currently trading at $1,904.76 per ounce as of 0718 GMT.

SPI Asset Management’s managing partner Stephen Innes noted that the bullion currently draws its strength mainly from the weaker dollar and inflation fears. Some experts predicted gold prices to reach $2,000, while others expect it to go even higher.

Meanwhile, President Joe Biden has released his $6 trillion proposed budget for the fiscal year 2022. It includes the $4 trillion American Jobs Plan and the American Families Plan. The budget request would boost base discretionary spending by 8.4% or $118 billion. According to the White House, the budget will help ensure a strong economy now and for decades into the future. But the Republicans said it was too grandiose and could overheat the economy.

In economic news, Japan reported a 2.5% increase in industrial output in May. It is the second monthly rise and has exceeded the pre-pandemic level. In China, the National Bureau of Statistics also reported an expansion of factory activity but at a slower-than-expected pace.

In physical trading, gold demand in India remained low last week as most jewelry stores were still closed due to COVID-19 lockdowns. Dealers offered discounts of as much as $10 per ounce, the highest in eight months.

On the technical, Phillip Futures senior commodities manager Avtar Sandu noted strong support for the bullion at the $1,875 and $1,850 levels. He predicted that if gold trades above $1,915.60 per ounce, then it could lead to the expectation of hitting $1,950.

In a related development, the holdings of the largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, fell 0.1% on Friday to 1,043.21 tons. Market participants are monitoring the release of U.S. payroll data for May due this week. The median forecast is 650,000 jobs.