PRECIOUS-Gold slides 1% as dollar gains, risk sentiment improves

(Updates prices)
* Dollar rebounds from two-week low
* China coronavirus death toll rises
* Gold specs cut bullish positions in week to Jan. 28 -CFTC

By Brijesh Patel
Feb 3 (Reuters) - Gold fell 1% on Monday as the dollar
firmed and investors opted for riskier assets after China took
steps to relieve pressure on its economy from the impact of the
coronavirus outbreak.
Spot gold XAU= dipped more than 1% and was down 0.8% at
$1,576.77 per ounce by 01:36 p.m EST (1836 GMT).
U.S. gold futures GCv1 settled 0.3% lower to $1,582.40 per
ounce.
"China have been taking very strong measures to make sure
this thing (coronavirus) is contained, that's kind of helping
market sentiment," said Bart Melek, head of commodity strategies
at TD Securities.
"We have a bit of jump in the U.S. dollar and the biggest
thing is that we're seeing a rebound in stocks, getting people
to perhaps take some profits and reposition modestly."
China's central bank unexpectedly lowered interest rates and
injected 1.2 trillion yuan ($171 billion) into money markets as
it attempted to limit the damage from travel curbs and business
shutdowns on the economy. China's move cheered some investors as U.S. stocks rose on
Monday after the three main indexes suffered their worst week in
at least four months. The dollar gained 0.4% against its rivals, making gold
expensive for holders of other currencies. "Once we get through this 'band-aid effect,' the reality
will set in that there is an economic tumult about to happen in
China, which is going to spread globally and force a lot of
central banks to cut rates," said Stephen Innes, chief market
strategist at AxiCorp.
Gold tends to appreciate on expectations of lower interest
rates, which reduce the opportunity cost of holding non-yielding
bullion.
Gold, often used as a safe store of value during times of
political and financial uncertainty, registered its best week in
a month in the week to Jan. 31, as economic growth worries due
to the epidemic boosted appetite for safe havens.
"Gold's rally seems to be in pause mode as markets will
likely see central banks globally be proactive to thwart any
slump coronavirus concerns will trigger," Edward Moya, a senior
market analyst at broker OANDA, said in a note.
Speculators cut their bullish positions in COMEX gold
contracts in the week to Jan. 28, data showed on Friday. CFTC/
Elsewhere, silver XAG= fell 2.1% to $17.65 per ounce.
Palladium XPD= gained 1.7% to $2,317.17 and platinum XPT=
rose 1.1% to $966.72.
($1 = 7.0155 Chinese yuan renminbi)