* Dollar rebounds from two-week low
* China coronavirus death toll rises
* Gold specs cut bullish positions in week to Jan. 28 -CFTC
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 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 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.
Elsewhere, silver fell 2.1% to $17.65 per ounce. Palladium gained 1.7% to $2,317.17 and platinum rose 1.1% to $966.72. ($1 = 7.0155 Chinese yuan renminbi) (Reporting by Brijesh Patel in Bengaluru; editing by Chris Reese and Nick Zieminski)
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