May 31 (Reuters) - Gold firmed on Monday and was on course for its biggest monthly jump since July 2020, as the U.S. dollar headed for a second month of decline while growing inflationary pressures also lifted bullion’s appeal.

Spot gold was up 0.3% at $1,907.90 per ounce by 0538 GMT, while U.S. gold futures rose 0.2% to $1,909.50. Spot prices have climbed nearly 7.9% so far this month.

Most markets are closed in the United States and Britain on Monday for public holidays.

“The dollar is staying weaker, that’s fairly supportive. Gold bulls now have their eyes set on $2,000, and most are thinking it’s going to go quite a lot higher,” said Stephen Innes, managing partner at SPI Asset Management.

The dollar index was headed for its second straight monthly decline versus rivals, while the U.S. 10-year Treasury yield fell to 1.593% on Friday, reducing the opportunity cost of holding non-interest bearing gold.

Data on Friday showed U.S. consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve’s 2% target and posting its largest annual gain since 1992.

Gold is often seen as an inflation hedge, although Fed Chair Jerome Powell has repeatedly stated that higher inflation will be transitory.

“For as long as the Fed refuses to change its monetary policy in response to rising inflation, real interest rates will continue sliding ever further into negative territory, which is good news for gold,” Commerzbank analyst Carsten Fritsch said in a note.

Investors’ focus this week will be on U.S. payrolls data on Friday, with median forecasts suggesting they will show an increase of 650,000.

Palladium rose 0.2% to $2,832.35 per ounce, but was set for its first monthly decline in four months. Platinum climbed 0.7% to $1,185.85.

Silver gained 0.6% to $28.05 and was heading for its largest monthly gain since December.