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.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.30% at 109.02.