Jan 20 (Reuters) - Gold prices edged higher on Wednesday as the dollar weakened after U.S. Treasury Secretary nominee Janet Yellen urged lawmakers for more coronavirus relief spending, lifting bullion's appeal as an inflation hedge.
FUNDAMENTALS
* Spot gold XAU= rose 0.2% to $1,842.02 per ounce by 0042 GMT. U.S. gold futures GCv1 gained 0.1% to $1,842.50.
* Yellen on Tuesday argued that the economic benefits of a large stimulus will far outweigh the risks of a higher debt burden. Gold is considered a hedge against inflation and currency debasement that can result from widespread stimulus.
* The dollar dropped for a second straight session on Tuesday, while most U.S. Treasury yields fell after Yellen commented in her hearing that tax cuts enacted in 2017 for large corporations should be repealed. USD/ US/
* President-elect Joe Biden will be sworn into office on Wednesday and investors will be focused on his $1.9 trillion stimulus package proposal to boost the economy and speed up the distribution of vaccines. The United States surpassed 400,000 deaths from the COVID-19 on Tuesday, while some European countries are drawing fewer than the approved six doses from Pfizer (NYSE:PFE) and BioNTech's vaccine vials. Bank of England chief economist Andy Haldane said on Tuesday that he expected Britain's economy to begin to recover "at a rate of knots" from the second quarter of this year, as vaccines against COVID-19 are rolled out. SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.3% to 1,174.13 tonnes on Tuesday from 1,177.63 tonnes on Friday. GOL/ETF
* Silver XAG= climbed 0.3% to $25.26 an ounce. Platinum XPT= rose 0.6% to $1,089.33, while palladium XPD= gained 0.1% to $2,354.75. DATA/EVENTS (GMT) 0700 UK CPI YY
Dec 1000 EU HICP Final MM, YY Dec Bank of Japan holds Monetary Policy Meeting to Jan. 21