09:09 AM EST, 01/20/2025 (MT Newswires) -- Gold edged down early on Monday as the dollar traded sharply lower ahead of Donald Trump's return to the White House.

Gold for February delivery was last seen down US$3.40 to US$2,745.30 per ounce.

The drop comes ahead of Monday's inauguration of Donald Trump as he returns to the U.S. presidency promising sweeping changes to the economy and tariffs on imports from the country's largest trading partners. Still, Trump's threat to impose 60% tariffs on imports from China is seen as being in doubt as he backed off a law suspending the TikTok social media service and held a call with China's president.

"The US dollar was volatile Friday on Trump's mention of a "very good" phone call with China's president Xi Jinping, as the knee-jerk market reaction was to interpret this as a friendly overture to China, a possibly insinuating that Trump might take a stance of negotiation with China on trade rather than coming out strongly with large tariffs," Saxo Bank noted.

The dollar remained volatile early on Monday, with the ICE dollar index last seen down 1.04 points to 108.31. A weaker dollar generally push gold and other commodities priced in the U.S. currency higher.

Treasury markets are closed for the Martin Luther King Jr. Day holiday.