PRECIOUS-Gold near 2-week low after reports of anti-coronavirus drug

(Updates prices and details)
* European shares jump more than 1%
* China virus expected to have devastating impact on Q1
growth

By Sumita Layek
Feb 5 (Reuters) - Gold prices steadied after touching their
lowest in two weeks on Wednesday, as reports of drug
breakthroughs in treating the coronavirus lifted European shares
and dented some of bullion's safe haven appeal.
Spot gold XAU= was little changed at $1,551.97 per ounce
by 1324 GMT, having fallen to its lowest since Jan. 21 at
$1,546.90. U.S. gold futures GCv1 rose 0.1% to $1,557.20.
"We're hearing some talks that the Chinese have found a drug
against coronavirus, so on the back of that we have a pick up in
stock markets and sell off in gold," said Afshin Nabavi, senior
vice president at precious metals trader MKS SA.
European shares jumped more than 1% after a Chinese TV
report said that a research team at Zhejiang University had
found an effective drug for the virus. MKTS/GLOB However, the World Health Organization played down media
reports of "breakthrough" drugs for treatment of coronavirus
saying "there are no known effective therapeutics against this
2019-nCoV (virus)". "Investors are expecting less risk coming from the virus
epidemic, good measures are being taken to try to contain the
virus and that is giving good optimism in the markets,"
ActivTrades chief analyst Carlo Alberto De Casa said.
The easing monetary policy measures from China have "calmed
down the storm in the markets and investors are quite reassured
by this."
The virus outbreak in China since last month has claimed
nearly 500 lives so far and crippled activity in the
second--largest economy in the world. "Just the fact that nobody (in China) is going out, nobody
is spending money, everything has come to a complete standstill,
it's going to be very bad for the Chinese economy at least in
the short term," MKS SA's Nabavi said.
Concerns of the economic impact from the outbreak and any
spillover in the global growth remained, with Chinese
policymakers readying measures to support an economy jolted by a
virus outbreak that is expected to have a devastating impact on
first-quarter growth. ADP national employment report showed U.S. employment
increased by 291,000 private sector jobs in January, its highest
since May 2015.
Among other precious metals, palladium XPD= was up 1.8% at
$2,477.30 an ounce, having touched a near two-week peak of
$2,498.07 earlier in the session.
Silver XAG= rose 0.1% to $17.59, while platinum XPT=
gained 1.1% to $973.43.