Gold firmed on Monday on a softer dollar as investors awaited Donald Trump's inauguration speech later in the day for insights into his policies that are expected to provide clarity on the inflation outlook and Federal Reserve's future rate decisions.

The dollar inched lower against most major currencies as traders trimmed widely-favored bullish positions on the greenback just hours ahead of Donald Trump’s second inauguration as the US President.

The dollar was hovering near a more than two-year high at the start of a pivotal week on Monday, as Donald Trump re-enters the White House with an inauguration speech that will be of primary focus for investors hoping to decipher his immediate policies.

Goldman Sachs is hardly alone in predicting a further 5% jump in the dollar this year. Commodity Futures Trading Commission data find that investors — from big asset managers to hedge funds — are the most optimistic about the dollar’s upside since 2019.

Speculative currency traders bolstered wagers for an even stronger US dollar in the leadup to President-elect Donald Trump’s return to the White House.

The dollar held gains against the yen on Friday, but ended the week lower after a six-week winning streak, as investors await Donald Trump's presidential inauguration and clarity on the course of the incoming administration's policies.