PRECIOUS-Gold gains on Yemen attacks, China Lunar New Year buying

(Adds comments, details, updates prices)
* Volumes thin with U.S. closed for holiday
* Gold specs cut bullish positions in week to Jan. 14
* SPDR Gold holdings rose to highest since Nov. 11 on Friday

By Asha Sistla
Jan 20 (Reuters) - Gold prices rose to their highest in more
than a week on Monday, after a missile attack in Yemen over the
weekend fanned geopolitical concerns and boosted the metal's
safe-haven appeal, while buying ahead of the Chinese New Year
also lent support.
Spot gold XAU= was up 0.3% at $1,560.89 per ounce by 0726
GMT, after touching its highest since Jan. 10 at $1,562.51
earlier in the session. U.S. gold futures GCv1 were flat at
$1,560.50.
"Chinese New Year is in front of us and some buying has
emerged because of that," Ajay Kedia, director at Kedia Advisory
in Mumbai, said.
"The market is also going up because of central bank buying,
geopolitical risks such as Yemen missile attack - all these
factors are supporting gold."
Iran-aligned Houthis attacked a military training camp in
the Yemeni city of Marib on Saturday, killing dozens of people.
Gold is considered a safe investment in times of political
and economic uncertainty.
"Investors are clearly focused on the longer term dynamics,
which should play in gold's favour with low interest
environment, central banks' loosening policy to help support
growth and subsequent weakness in the dollar," ANZ analyst
Daniel Hynes said.
The U.S. Federal Reserve will meet for its first policy
meeting of the year later this month, where it is widely
expected to keep interest rates unchanged.
The central bank cut interest rates three times last year
before deciding in December to stand pat. Lower interest rates
encourage the buying of non-interest-paying bullion. However, limiting gold's advance, Asian stocks held close to
a 20-month high, supported by an extended rally in global stocks
on Wall Street and solid U.S. economic data. MKTS/GLOB
U.S. homebuilding surged to a 13-year high last month as
activity increased across the board, while production at
factories increased for a second straight month, data showed on
Friday. Trading volumes were low with U.S. markets closed for a
holiday.
Spot gold may test a resistance at $1,564 per ounce,
according to Reuters technical analyst Wang Tao. TECH/C
Speculators cut their bullish positions in COMEX gold
contracts in the week to Jan. 14, data showed. CFTC/
Holdings of the world's largest gold-backed exchange-traded
fund SPDR Gold Trust GLD rose 2.20% to 898.82 tonnes on
Friday, their highest since Nov. 11. GOL/ETF
Palladium XPD= advanced 0.9% to $2,502.00 an ounce, after
the auto-catalyst metal hit a record high of $2,537.06 on
Friday. Silver XAG= rose 0.4% to $18.07, while platinum XPT=
jumped 0.8% to $1,026.53.