(Adds oil, gold settlement prices, trade talk comment)
* GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh
* Stocks gain broadly after Fed's policy caution
* Fed slams brakes on rate hikes, Treasury yields skid
* Facebook soars after better-than-expected results
By Herbert Lash
NEW YORK, Jan 31 (Reuters) - Global equity markets mostlyrose on Thursday, propelled by Facebook's upbeat earnings andthe Federal Reserve's pledge to be patient in raising borrowingcosts further, while U.S. bond yields fell on indications ofweaker-than-expected inflation.
Brent oil prices, an international benchmark, rose for athird day, extending a rally this month as an output cut by theOrganization of the Petroleum Exporting Countries, Russia andothers took effect. U.S. oil pared gains to close lower.
MSCI's gauge of global stock performance and an emergingmarkets index rose, as did the Nasdaq and S&P 500 on WallStreet, propelled by an 11.5 percent gain by Facebook after itsquarterly results topped analysts' estimates.
European shares closed mostly flat and the Dow fell on adownbeat report by DowDuPont Inc, as investors awaitednews about the U.S.-China trade talks in Washington.
U.S. and Chinese officials made "some progress" inaddressing differences over intellectual property rights andmarket access issues, but gaps exist in other structural issues,U.S. Chamber of Commerce officials briefed on trade talks said.
The Fed's dovish stance on monetary policy eased concernsthat tightening financial conditions could crimp growth.
"It seems as if most of the fears have been taken awayexcept for trade," said Andre Bakhos, managing director at NewVines Capital LLC in Bernardsville, New Jersey.
E-commerce behemoth Amazon was the other big focus,with it set to report results after the closing bell.
MSCI's gauge of stocks across the globe rose0.81 percent, on track to its best January on record, and itsemerging market index gained 1.25 percent.
European shares ended a choppy session flat as disappointingeconomic data, including a technical recession in Italy, sappedan early boost provided by the Fed's dovish tone.
German retail sales fell at the fastest rate in 11 years,British car production posted its biggest drop since 2009 andeuro zone growth was the slowest in four years.
The STOXX 600 ended the day up 0.04 percent butgained 6.1 percent in January, its strongest month since October2015.
The FTSEurofirst 300 index of leading Europeanshares closed up 0.23 percent, with oil heavyweights Royal DutchShell, BP and Total among top gainers.
The dollar index rose 0.25 percent, with the eurodown 0.3 percent to $1.1442. The Japanese yenfirmed 0.15 percent versus the greenback at 108.89 per dollar.
The Employment Cost Index, the broadest measure of U.S.labor costs, rose 0.7 percent in the fourth quarter after anunrevised 0.8 percent gain the previous quarter, the LaborDepartment said.
The data continued a pattern of low inflation.
Two-year U.S. Treasury debt yields, which reflectexpectations of interest rate hikes, fell to a nearly four-weeklow of 2.49 percent.
"What you've seen the last couple days with the market isthe Street's reaction to recognition that cheap money is goingto continue for the foreseeable future," said Brian Ward, chiefexecutive of Trimont Real Estate Advisors in Atlanta.
The 10-year U.S. Treasury note rose 14/32 inprice to push its yield down to 2.6453 percent.
U.S. West Texas Intermediate (WTI) crude futuresfell 44 cents to settle at $53.79 per barrel. Brent crude oilfutures rose 24 cents to settle at $61.89.
U.S. gold futures settled up 0.7 percent to $1,319.70an ounce.
(Reporting by Herbert Lash in New York, additional reporting bySruthi Shankar in BengaluruEditing by Phil Berlowitz and James Dalgleish)