Oct 20 (Reuters) - Gold prices inched lower early on Tuesday as caution set in ahead of the deadline to reach an agreement on a new U.S. coronavirus stimulus, diminishing the metal's appeal of being a hedge against inflation.
FUNDAMENTALS
* Spot gold XAU= fell 0.1% to $1,903.16 per ounce by 0055 GMT.
* U.S. gold futures GCv1 were down 0.3% at $1,906.50.
* U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin "continued to narrow their differences" about a fresh aid package, Pelosi's spokesman, Drew Hammill, wrote on Twitter. Pelosi hopes that by the end of Tuesday there will be "clarity" on whether a coronavirus stimulus bill can be passed before the Nov. 3 elections, Hammill wrote.
* The U.S. economy is rebounding strongly after taking a big hit because of the pandemic, but it may be another year before the economy returns to pre-crisis levels and take even longer for the labor market to recoup lost ground, Federal Reserve Vice Chair Richard Clarida said on Monday. Britain sees no basis to resume trade talks with the European Union unless there is a fundamental change in approach from Brussels, chief negotiator David Frost said, dashing earlier optimism that negotiations could resume. The European Central Bank will maintain an accommodative policy in response to the ongoing coronavirus crisis, ECB President Christine Lagarde said. The dollar index .DXY was steady against rivals, while Asian stocks came under pressure. USD/ MKTS/GLOB
* SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.02% to 1,272.85 tonnes on Monday from 1,272.56 tonnes on Friday. Silver XAG= fell 0.3% to $24.43 per ounce, platinum XPT= and palladium XPD= were 0.1% higher at $856.85 and $2,345.37, respectively.
DATA/EVENTS (GMT)
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