PRECIOUS-Gold gains as virus concerns linger, investors await Fed

(Updates prices)
* Death toll from coronavirus rises to 132 in China
* Recovery in equities capping gold's gains - analyst
* U.S. Fed policy statement due at 1900 GMT

By Diptendu Lahiri
Jan 29 (Reuters) - Gold rose on Wednesday, propped up by
lingering concerns over the economic impact of a coronavirus
outbreak in China, while investors awaited a policy decision
from the U.S. Federal Reserve later in the day.
Spot gold XAU= was up 0.2% at $1,569.38 per ounce at 1323
GMT, having fallen about 1% in the previous session after
positive U.S. economic data drove a recovery in equities.
U.S. gold futures GCcv1 were little changed at $1,569.30
an ounce.
"The coronavirus will definitely have some impact on the
Chinese economy and that will mostly affect the country's
currency, but an impulsive bull trend in gold is not expected
yet," said Bernard Sin, group head of trading at MKS.
Safe-haven gold held aloft despite signs of stabilisation in
global stock markets as equities investors tried to look past
China's coronavirus outbreak, encouraged by better-than-expected
company earnings. MKTS/GLOB
While rising stocks are capping gold's gains, it is still
being supported by other factors such as uncertainty around U.S.
President Donald Trump's impeachment and tensions in the Middle
East, said Quantitative Commodity Research analyst Peter Fertig.
Risk aversion has not completely lifted, however. With the
number of coronavirus fatalities now at 132 and 6,000 cases
reported worldwide, there are fears the outbreak could inflict
damage on Chinese growth. If there is an escalation, gold could breach $1,600, Jeffrey
Halley, senior market analyst at OANDA, said in a note.
Investors are now waiting for the Fed's monetary policy
statement at 1900 GMT. FEDWATCH/ Possibly of greatest interest will be what if anything Fed
Chair Jerome Powell has to say about the high Treasury purchases
the Fed has been making since October to inject more liquidity
into the money market, Commerzbank said in a note.
Lower interest rates reduce the opportunity cost of holding
non-yielding bullion.
"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= fell 0.6% to $2,276.64 an ounce,
while platinum XPT= was up 0.2% at $987.37.
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. PREC/POLL
Silver XAG= rose 0.2% to $17.47, having earlier dipped to
its lowest since Dec. 23 at $17.35.