We present a calculation of the rare decay mode D^0 -> gamma gamma, in which
the long distance contributions are expected to be dominant. Using the Heavy
Quark Chiral Perturbation Theory Lagrangian with a strong g coupling as
recently determined by CLEO from the D^* -> D pi width, we consider both the
anomaly contribution which relates to the annihilation part of the weak
Lagrangian and the one-loop pi, K diagrams. The loop contributions which are
proportional to g and contain the a_1 Wilson coefficient are found to dominate
the decay amplitude, which turns out to be mainly parity violating. The
branching ratio is then calculated to be (1.0+-0.5)x10^(-8). Observation of an
order of magnitude larger branching ratio could be indicative of new physics.Comment: 16 pages, 5 figures, additional reference and several remarks added,
results unchange