PRECIOUS-Gold rises as virus woes persist, focus shifts to Fed

(Updates prices)
* Death toll from coronavirus rises to 132 in China
* Fed expected to hold rates, statement due at 19:00 GMT

By Brijesh Patel
Jan 29 (Reuters) - Gold gained on Wednesday as worries over
economic growth due to the fast-spreading coronavirus buoyed
safe haven demand, with investors awaiting the U.S. Federal
Reserve's monetary policy decision.
Spot gold XAU= was up 0.3% at $1,570.36 per ounce by 1:33
p.m. EST (1833 GMT).
U.S. gold futures GCv1 settled mostly unchanged at
$1,570.40 per ounce.
"Investors are looking for hints on what the Fed will do
with rates in 2020," said Bob Haberkorn, senior market
strategist at RJO Futures.
The U.S. central bank is set to share the statement of a
two-day monetary policy meeting at 2 p.m. EST (1900 GMT).
While the Fed is not expected to change interest rates,
investors will want to hear whether its chairman, Jerome Powell,
retains his cautiously upbeat language. Lower interest rates decrease the opportunity cost of
holding non-yielding bullion and weigh on the dollar, making
gold cheaper for investors holding other currencies. USD/
"Other than the Fed factor, reasons for investors' interest
in gold are the coronavirus impact and how it will affect the
Chinese economic data," Haberkorn added.
The United States and Japan evacuated their nationals from a
quarantined city, Wuhan, in China, while British Airways
suspended flights as deaths from the outbreak rose to 132 and
the first cases emerged in the Middle East. Although better-than-expected corporate earnings helped
drive a slight recovery in financial markets, fears over the
economic fallout from the outbreak weighed on investor appetite
for riskier assets. MKTS/GLOB
On Tuesday, gold prices fell nearly 1% after positive U.S.
economic data lifted equity markets along with the dollar.
Further bolstering gold's appeal, U.S. Treasury yields also
fell on concerns surrounding the epidemic. US/
"The main driver for gold this year will be strategic
inflows, as it will continue to be viewed as an attractive
diversifier for investor portfolios in an environment where
rates remain low," UBS strategist Joni Teves said.
Elsewhere, palladium XPD= eased 0.1% to $2,286.08 per
ounce, while platinum XPT= dipped 1.5% to $971.04.
Palladium will cost on average more than twice as much as
platinum this year, but that premium will narrow in 2021, a
Reuters poll showed. Silver XAG= rose 0.2% to $17.48, having earlier dipped to
its lowest since Dec. 23 at $17.35.