Wires

PRECIOUS-Gold prices edge higher on soft dollar

Jan 2 (Reuters) - Gold prices rose slightly on Thursday as the dollar remained on the back foot on signs of progress in trade ties between the United States and China.

FUNDAMENTALS

* Spot gold gained 0.1% to $1,518.60 per ounce by 0043 GMT. Prices hit their highest since Sept. 25 at $1,525.20

$1,521.60.

* The dollar started the new year under pressure as investors wagered U.S. economic outperformance could be coming to an end as optimism on trade brightens the outlook for growth globally.

* A weaker greenback makes commodities priced in dollars, such as precious metals, cheaper for holders of other currencies.

* On the trade front, U.S. President Donald Trump said on Tuesday the Phase 1 trade deal with China would be signed on Jan. 15 at the White House, although investors still awaited details of the agreement.

* Bullion ended 2019 with its strongest annual increase since 2010, as worries over global economic health triggered a surge of interest in precious metals, while palladium soared more than 50% to record highs due to supply shortages.

* China's central bank said on Wednesday it was cutting the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan in funds to shore up the slowing economy.

* The U.S. Federal Reserve averted a year-end funding squeeze on Tuesday as large banks took only a small portion of $150 billion on offer in its last overnight repo operation of 2019, and the cost of borrowing fell to its lowest level since March 2018.

* Among other precious metals, silver rose 0.3%

DATA AHEAD (GMT) 0145 China Caixin Mfg PMI Final Dec 0500 India Markit Mfg PMI

0850 France Markit Mfg PMI 0855 Germany Markit/BME Mfg PMI

0930 UK Markfit/CIPS Mfg PMI Final Dec 1100 Brazil Markit Mfg PMI Dec 1330 US Initial Jobless Claims w/e Dec 28 1330 US Continued Jobless Claims w/e Dec. 21 1430 Canada Markit Mfg PMI SA Dec 1445 US Markit Mfg PMI Final Dec

(Reporting by Sumita Layek in Bengaluru; Editing by Subhranshu Sahu)