NEW YORK (

TheStreet

) --

Gold prices

were rising over $20 Monday as the U.S. dollar sank.

Gold for April delivery, the most actively traded contract, was rising $20.90 to $1,104.70 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,107.90 and as low as $1,077.20. The

U.S. dollar index

was sinking 0.24% to $79.27.

Gold prices found support Monday after

President Obama unveiled his budget

with a record deficit of $1.56 trillion. The news put short term pressure on the dollar. A weaker dollar makes gold less expensive to buy in other currencies sparking demand and raising prices.

A Weary Gold Market?

Image placeholder title

Gold's rally could be short lived, "

the rally could

just be the Monday exuberance," argues George Gero, vice president of global futures at RBC Capital Markets. "Perhaps we are in a tired market that needs recycling."

The dollar could see more upside on the back of European credit fears, a weak Euro and China monetary tightening. Manufacturing activity in China was reportedly 55.8 in January. Although this figure signifies growth, it is lower than the December reading of 56.6 indicating that constriction of bank lending is impacting the growth of the country. "It is likely that the continued tightening of the Chinese monetary base will negatively impact metal prices over the near-term," says Anthony Rizzuto, Jr. managing directing at Dahlman Rose & Co. in his daily metals and mining note.

Silver prices

were rising 48 cents to $16.67 while copper was up 4 cents to $3.09. Platinum and palladium were both stronger at $1,548 and $429, respectively.

Image placeholder title

Mining stocks, a more leveraged way to

invest in gold

, were rising with broader equities.

Barrick Gold

(ABX)

and

Newmont Mining

(NEM) - Get Report

were rising to $36.24 and $45.15, respectively. Other large cap miner

Kinross Gold

(KGC) - Get Report

was rising 4.12% to $16.98 and

AngloGold Ashanti

(AU) - Get Report

was up 3.36% to $36.91.

Shares of

Freeport McMoRan Copper & Gold

(FCX) - Get Report

were popping 6.13% to $71.11 after the stock sold off dramatically last week on China growth concerns.

Southern Copper

(PCU)

was regaining ground as well rising 6.12% to $28.29.

Shares of the popular physically backed ETF

SPDR Gold Shares

(GLD) - Get Report

were higher by 2.10% to $108.16. Tonnage for the ETF has remained at 1,111 tons for two consecutive weeks on lackluster investment demand.

>>Slideshow: How to Invest in Gold

>>More stories on gold investing

--

Written by Alix Steel in New York

.

Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.