PRECIOUS-Gold climbs to 2-week high as virus fears spark safety buying

(Updates prices)
* Coronavirus death toll rises to 81 in China
* Gold's next resistance is at $1,600/oz - analyst
* Speculators cut bullish gold positions in week to Jan 21
-CFTC
* Investors await Fed meeting scheduled on Jan 28-29

By Asha Sistla
Jan 27 (Reuters) - Gold prices rose to their highest in more
than two weeks on Monday as equities slipped on growing concerns
that a China virus outbreak could impact that nation's economy,
prompting investors to drop riskier assets and look for safe
havens.
Spot gold XAU= climbed 0.5% to $1,577.93 per ounce by 0743
GMT. Earlier in the session, prices rose as much as 1% to their
highest since Jan. 8 at $1,586.42.
U.S. gold futures GCv1 rose 0.3% to $1,576.50.
Asian stocks slipped as the coronavirus killed 81 people and
infected more than 2,700 in China, with residents of Hubei
province, where the disease originated, banned from entering
Hong Kong amid global efforts to halt the rapid spread.
MKTS/GLOB
Investors are "looking out for the new risk (coronavirus)
coming into the markets and running for the exits in equity
markets, that's the cause for gold to move higher," Stephen
Innes, chief market strategist at AxiCorp, said.
"The virus is going to hurt the Chinese economy to a certain
degree," he added.
The outbreak has curbed Lunar New Year celebrations in
China, when hundreds of millions of people would normally be
travelling around the country, and also led the government to
extend the holidays to Feb. 2 as a preventive measure.

Gold is considered a safe investment during times of
political and economic uncertainty.
"The continuation of the gold rally will rely on
developments for good, or for ill, of the Wuhan virus
situation," Jeffrey Halley, senior market analyst, OANDA, said
in a note.
"From a resistance point of view, the next level to watch is
$1,600 an ounce."
Meanwhile, the yen rose on worries that authorities are
struggling to contain the outbreak. USD/
Investors now await the U.S. Federal Reserve's first policy
meeting of the year scheduled on Jan. 28-29, where it is widely
expected to keep rates unchanged. FEDWATCH
Hedge funds and money managers cut their bullish positions
in COMEX gold contracts in the week to Jan. 21, data showed on
Friday. CFTC/
Silver XAG= rose 0.5% to $18.18, having earlier touched
its highest since Jan. 8 at $18.32.
Palladium XPD= dropped 2.1% to $2,375.83 an ounce, while
platinum XPT= fell 1% to $990.98.