PRECIOUS-Gold falls 1% as China works to stem economic impact of virus

(Updates prices)
* Gold to stay in $1,550-$1,600/oz range for now - analyst
* Palladium jumps more than 4%
* U.S. factory orders rise above expectations

By Diptendu Lahiri
Feb 4 (Reuters) - Gold slid more than 1% on Tuesday as
China's steps to mitigate the economic impact of the coronavirus
epidemic drove some investors away from safe havens and back
into riskier assets.
Spot gold XAU= fell 1.61 % to $1,550.69 per ounce by 1:40
p.m. EST (1840 GMT), after hitting its lowest since Jan. 21 at
$1,548.70. U.S. gold futures GCcv1 settled down 1.7% at
$1,555.50.
"The dramatic move in global equity markets, especially in
the U.S. markets, clearly indicates there is lesser concern
about coronavirus denting GDP and we have a lesser need for safe
havens," said David Meger, director of metals trading at High
Ridge Futures.
Wall Street built on a recovery in world stocks as fresh
intervention by China's central bank calmed investor nerves.
MKTS/GLOB
Beijing's efforts included signing off on more government
spending, tax relief and subsidies for virus-hit sectors, policy
sources said. The outbreak has undermined the country's economic activity
as cities are locked down, with travel restrictions and
businesses closed.
Further, the dollar .DXY strengthened, making gold more
expensive for buyers holding other currencies.
Nevertheless, some uncertainty remained about the extent of
the impact on the Chinese and global economies.
"In case the impact of the virus is less than the market has
priced in, it could lead to a correction in gold prices, but as
long as we don't see economic growth accelerate, gold prices
will remain supported," said Quantitative Commodity Research
analyst Peter Fertig.
Some traders have also started to price in a cut to U.S.
interest rates by June.
Lower interest rates reduce the opportunity cost of holding
the non-yielding bullion.
Gold should stay within a range of $1,550 to $1,600 an ounce
ahead of more political and economic headlines, George Gero,
managing director at RBC Wealth Management, said in a note.
On the economic front, new orders for U.S.-made goods rose
1.8%​​ in December, beating analysts' consensus forecast of a
1.2% gain. India's gold imports in January plunged 48% from a year
earlier as a rally in local prices near record highs prompted
buyers to curtail purchases, a government source said.
Elsewhere, palladium XPD= gained 4.5% to $2,423.76, after
touching its highest since Jan. 24 at $2,435.
"Now that optimism has returned to financial markets, it
seems that market participants have forgotten their fears of how
the spread of the coronavirus might affect demand," Commerzbank
analysts said in a note.
"Nonetheless, the consequences for China, the main consumer
of palladium, are likely to be very serious."
Silver XAG= fell 0.5% to $17.57, while platinum XPT=
dipped 0.4%, to $962.83.