Gold prices edge higher as US dollar, yields soften
May 16 (Reuters) -Gold prices edged higher on Thursday, supported by a softer dollar and lower Treasury yields after data signalled cooling U.S. inflation, bolstering bets for an interest rate cut by the Federal Reserve.
FUNDAMENTALS
* Spot gold XAU= was up 0.3% at $2,393.21 per ounce, as of 0043 GMT. Bullion prices rose 1% on Wednesday.
* U.S. gold futures GCcv1 edged 0.1% higher to $2,397.60.
* The dollar =USD fell 0.2% against a basket of other major currencies, making gold more attractive for other currency holders. Benchmark 10-year US10YT=RR Treasury yields hit their lowest in a more than one month. USD/US/
* U.S. CPI rose 0.3% last month after advancing 0.4% in March and February, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.
* Federal Reserve policymakers waiting to see renewed progress on inflation before reducing borrowing costs got some encouraging data on Wednesday with a government report showing inflation eased a bit in April.
* Lower interest rates reduce the opportunity cost of holding non-yielding gold.
* Chicago Federal Reserve Bank President Austan Goolsbee said he was optimistic inflation would continue to come down.
* Escalation of the U.S.-China trade war seems unavoidable whoever wins the White House in November, but the equally inevitable inflationary pressures that brings won't automatically steer the Federal Reserve toward a more hawkish policy stance.
* India's merchandise trade deficit INTRD=ECI in April was wider than expected, hurt by lower exports and a surge in gold imports, government data showed on Wednesday.
* It's 'green for go' in Asia as stock markets around the world roar to fresh highs, boosted by renewed optimism that the Federal Reserve will soon start cutting U.S. interest rates.
* BHP Group's BHP.AX options for its pursuit of rival miner Anglo American AAL.L include sweetening its $42.7 billion buyout offer, making a hostile bid or walking away for now as it approaches a May 22 deadline to lodge a binding offer.
* Spot silver XAG= was unchanged to $29.71 per ounce, platinum XPT= was up 0.5% at $1,069.45 and palladium XPD= gained 0.3% to $1012.84.
DATA/EVENTS (GMT)
1230 US Housing Starts Number April
1230 US Import Prices YY April
1230 US Initial Jobless Clm Weekly
1230 US Philly Fed Business Indx May
1315 US Industrial Production MM April
Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Sherry Jacob-Phillips
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